"As we've pointed out before, the annual interest on our national debt now exceeds the entire annual budget for "defense" ... an empire's military that exceeds the next ten nations all combined." --Steve Scroggins, from Empire or Liberty?

"Fannie Mae, which owns or guarantees about 28 percent of the $11.8 trillion U.S. home-loan market, has been hobbled by a three-year housing slump that wiped 28 percent from home values nationwide and led to record foreclosures. The company, which posted $120.5 billion in losses over the previous nine quarters, and rival Freddie Mac were seized by regulators in September 2008." --Dawn Kopecki, Bloomberg.com

For a fellow who usually looks to the optimistic side of thorny problems, I've about run out of hope. Not total capitulation, but more concern for our republic than anytime in my life going back to the Great Depression.

Please read the latest report by Bloomberg News on the condition of the two mainstays of the mortgage market, Freddie Mac and Fannie Mae.
Fannie Taps Treasury for $15.3 Billion More After a 10th Loss

Not only are they broke, they have been for the past ten quarters while they continue to get big new bailouts from our national treasury.

Can you believe these financial wizards who actually say they'll pay their debts by borrowing more from the U. S. Treasury. Huh?

A close examination of any remedial action taking place seems to come up with the same ole same ole. No one currently involved in these operations seems to have a clue about slowing or reversing the trend. Worse, it now appears as though these unconscious incompetents don't even plan to come up with any ideas aimed at solutions until next year, avoiding the elections.

Meanwhile we sink further and further into a debt that is becoming so huge economists throughout the world are sending warnings of the potential reduction of the AAA bond rating the United States has always enjoyed. That signals a much larger cost of interest on the national debt which some believe will be unsustainable.
Fannie Taps Treasury for $15.3 Billion More After a 10th Loss
Headline: Lending Falls at Epic Pace - William Shughart
Anatomy of the Current Recession - Robert Higgs
We're Borrowing Like Mad. Can the U.S. Pay It Back? - Washington Post
Why Default on U.S. Treasuries is Likely - Jeffrey Rogers Hummel

Nations which have been buying our bonds have cut back and have actually warned our president to get our financial house in order or lose their future support. So far there has been little in response unless you count his relentless pursuit of a comprehensive health program which adds more debt and higher taxes and costs.

We can't handle it now, particularly with those who have been placed in positions to deal with these problems.

Adding to the problem is the growing list of homes that are now underwater, that is, the mortgages owed are greater than the value of the home. That is reported to be one in four. The existing housing supply now equals enough to cover many years ahead and it is growing every month.

This is all before two more big shoes are to drop. The scheduled increases in adjustable rate mortgages scheduled to begin this year. What is under reported so far is the collapse of commercial mortgages which are beginning to show up and may be as serious or more so than the housing problems.

Before we leave the gloom and doom, there is another huge shoe about to drop, the credit card losses that the big banks have been trying to accumulate enough cash to survive which means they're not lending it to the small business folks who need it badly to formulate any form of recovery.

There is a good barometer to judge for yourself and form your own opinion. On the home page of the Georgia Heritage Council website is a complete second by second accounting of all the national debt.

Click here for U.S. debt details.  USdebtClock.org