How Mae and Mac jacked up the US debt by 50% overnight [updated]

Once upon a time, the US government set up three agencies to provide home loans to people. The Federal National Mortgage Association (FNMA) was founded by FDR to improve the liquidity of the mortgage market. It sits in between the mortgage borrower and the lender. Its job is to assume the risk of mortgage default, in return for a fee. In the 1960s, part of it was removed from the federal balance sheet by spinning it off into a private corporation.

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The Bush administration is pushing the Workforce Reinvestment and Adult Education Act of 2003. What you might not guess from the title is that the legislation makes it legal for taxpayer-funded charity organizations to discriminate on the basis of religion when hiring. So, we can look forward to “Christians only” federally-funded jobs. It’s also being proposed to modify the rules at the department of Housing and Urban Development. The new rules will allow taxpayer money to be used to build churches, provided the proportion HUD pays to build the church doesn’t exceed the proportion of use it gets for “eligible activities”.