Zombie Love: Do Fannie and Freddie Provide Any Benefit to the U.S. Economy?

Thus while the banks absorb all of the subsidies from the Fed and Treasury, U.S. households, businesses and private investors are slowly destroyed. Policy makers in Washington know all of this, of course. Nobody in the Obama White House or the Fed dares to admit in public that the "quantitative easing" by the FOMC is pretty much useless in terms of helping the real, private economy.

Our suggestion? Recognize the losses in residential and commercial real estate, wipe the slate and start again. We can either deal with the problem quickly and restart the U.S. economy now. Or we can wait another four or five years for the process of strategic defaults and foreclosure to reprice the American real estate markets the old fashioned way.