Why are Fannie Mae and Freddie Mac So Important?

Many people think it is not important, but it is. Actually, if these two major companies were to fail, it could be the end of our structured economy as we know it. You see, Fannie Mae and Freddie Mac are mortgage companies that together hold loans of over $5 trillion. If these banks were to fail, the amount of the stocks would go down and banks would stop lending out money. People wouldn’t be able to pay for basic needs. The economy would cease to exist. We would most likely experience another Great Depression.

Could you imagine waking up to a “depressed” society? Imagine all of the money you have in the bank, gone because everyone has gone to your bank to take out their money. No money for school. No money for your house. No money for your car. If you didn’t have a job, you would probably have to find one.

As you can see by now, Fannie Mae and Freddie Mac are very important. The Congressional Budget expects taxpayers to pay about $25 billion to rescue these companies. Taxpayers may be furious at the amount of money they will be shelling out. However, in the long run, it is well worth the money.