Reply #8: There is big government and there are GSEs the private-public institutions [View All]

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The government sponsored enterprises (GSEs) are a group of financial services corporations created by the United States Congress. Their function is to enhance the flow of credit to targeted sectors of the economy and to make those segments of the capital market more efficient and transparent.

June 28,1990

The Six Trillion Dollar Debt Iceberg

A Review of the Government's Risk Exposure

In a congressional floor speech last spring decrying the cost of the savings and loan S&L) bailout, now estimated at between $150 billion and $300 billion, Representative Major Owens, the New York Democrat, declared that he believed there had never been a single item in peacetime that cost the government so much money ... {A}n examination of the finances of other government-backed agencies indicates that the bailout may be just the tip of a fiscal iceberg about to strike the American taxpayer. The total financial obligation of agencies underwritten by the federal government is now some $5.8 trillion and much of that obligation is in bad shape. ... The $4.2 billion loss at the Federal Housing Administration revealed in May 1989 in a General-Accounting Office.(GAO) audit and the Office of Management and Budgets Om) projection that the losses continue, are just among the latest hint of a vast liability that could land in the lap of taxpayers.

The governments total risk exposure of nearly $6 trillion dollars is more than twice the national debt held by the public and more than five times the annual federal budget countering serious financial problems.

Did you know that GSEs in 1990 had generated nearly $6 trillion dollars of taxpayer debt?