Nothing Happens in the Summer

Hello everyone. While the economy continues its struggles and the heat of the summer drones on, the news continues to remain hot, not cool. Usually, our beloved Congress is gearing up for a long vacation recess and not much is on the table. In my last post, I hinted that I would actually read the 1,000 page monstrosity of a health care reform bill. At this point, there is a lot of activity but not much to review yet. There are different versions of this bill in various committees. Why is this so important to you? This reform affects 1/6th of the economy, your healthcare plan now and in the future. We all know the status quo is not sustainable nor acceptable. But the alternatives are becoming unpalatable. One side of Congress believes an overhaul is required while the other side believes that we should fix the system step by step.

In some cases, I am afraid to go on vacation myself. Congress might sneak in a bill that hurts the country during the recess. Its happened before and doesn't mean it can't happen again. Meanwhile, there are many regulatory controls being bandied about in Congress and they don't get the same level of media coverage, which is a shame. I believe that more regulation is not the way to go. Putting in the right regulation and actual enforcement of that regulation is the best approach. Unfortunately, the regulations we have now didn't prevent the financial mess we are in now but the actual oversight of those regulations did.

Do you know that Fannie Mae and Freddie Mac hold 1/2 of all mortgages in the United States. How did they do that? Well, our beloved government allowed them to buy more mortgages and take greater risks. Your local mortgage broker and bank don't have the capital to offer unending supply of mortgages. The money comes from Fannie/Freddie who pays the local bank for the mortgages. Fannie/Freddie bundle these things up and sell them on the financial market. Vicious cycle when things are going down. But I digress...

While we are accustomed to nothing happening in August, don't fall asleep in that hammock! You might wake up to a universal health care plan that you didn't bargain for. Cheers!