Question:

Should US taxpayers bail out foreign investors in Fannie Mae?

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According to one article I've read. The Chinese government owns $376 billion worth of Fannie Mae bonds. Other top foreign investors are Japan, the Cayman Islands, Luxembourg, and Belgium.

http://globaleconomicanalysis.blogspot.com/2008/07/us-taxpayer-bailout-of-china-over.html

There have been a lot of business articles recently saying that Fannie Mae and Freddie Mac are too big to fail. And US taxpayers will surely bail them out.

But there is no legal obligation for US taxpayers to bail them out.

A lot of Fannie and Freddie bonds are held by US investors too. And I wonder if US taxpayers would be more happy to bail them out. And how would the foreign investors feel if US taxpayers bail out only US investors?

Also, how would US taxpayers feel about being made responsible for trillions of dollars worth of other people's debt?

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2 ANSWERS


  1. One word: Communism.

    These bank bailouts are just a transfer of wealth, but actually if these fail it really could impact our economy. Unfortunately the US economy is ****** and this is just the beginning of a nightmare tailspin car crash


  2. Fannie Mae and Freddy Mac hold almost 6 trillion dollars of home mortgages, and have about 80 billion in assets, so they are in deep trouble. But should my tax dollars bail them out, absolutely not. Will the government bail my business out if it fails? Any legislation that rewards lenders, borrowers and investors at the expense of the American taxpayer, is a bailout that will set a terrible precedent, because everyone will be looking for government help  should future investments fail.

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