maybe this answers some questions as to why one would be so anti-paul
https://www.ronpaul.com/2008-09-26/ron-paul-on-the-housing-bubble-july-2002/
Congressman Ron Paul
U.S. House of Representatives
July 16, 2002
“Mr. Speaker, I rise to introduce the Free Housing Market Enhancement Act.
This legislation restores a free market in housing by repealing special
privileges for housing-related government sponsored enterprises (GSEs).
These entities are the Federal National Mortgage Association (Fannie),
the Federal Home Loan Mortgage Corporation (Freddie), and the National
Home Loan Bank Board (HLBB). According to the Congressional Budget
Office, the housing-related GSEs received $13.6 billion worth of
indirect federal subsidies in fiscal year 2000 alone.
One of the
major government privileges granted these GSEs is a line of credit to
the United States Treasury. According to some estimates, the line of
credit may be worth over $2 billion. This explicit promise by the
Treasury to bail out these GSEs in times of economic difficulty helps
them attract investors who are willing to settle for lower yields than
they would demand in the absence of the subsidy. Thus, the line of
credit distorts the allocation of capital. More importantly, the line of
credit is a promise on behalf of the government to engage in a massive
unconstitutional and immoral income transfer from working Americans to
holders of GSE debt.
The Free Housing Market Enhancement Act also repeals the explicit grant of legal authority given to the Federal Reserve
to purchase the debt of housing-related GSEs. GSEs are the only
institutions besides the United States Treasury granted explicit
statutory authority to monetize their debt through the Federal Reserve.
This provision gives the GSEs a source of liquidity unavailable to their
competitors.
Ironically, by transferring the risk of a widespread mortgage default, the government increases the likelihood of a painful crash in the housing market. This is because the special privileges of Fannie, Freddie, and HLBB have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions.
As a result, capital is diverted from its most productive use into
housing. This reduces the efficacy of the entire market and thus reduces
the standard of living of all Americans.
However, despite the
long-term damage to the economy inflicted by the government’s
interference in the housing market, the government’s policies of
diverting capital to other uses creates a short-term boom in housing. Like all artificially-created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners
will experience difficulty as their equity is wiped out. Furthermore,
the holders of the mortgage debt will also have a loss. These losses
will be greater than they would have otherwise been had government
policy not actively encouraged over-investment in housing.
Perhaps
the Federal Reserve can stave off the day of reckoning by purchasing
GSE debt and pumping liquidity into the housing market, but this cannot
hold off the inevitable drop in the housing market forever. In fact, postponing the necessary but painful market corrections will only deepen the inevitable fall. The more people invested in the market, the greater the effects across the economy when the bubble bursts.
No
less an authority than Federal Reserve Chairman Alan Greenspan has
expressed concern that government subsidies provided to the GSEs make
investors underestimate the risk of investing in Fannie Mae and Freddie
Mac.
Mr. Speaker, it is time for Congress to act to remove
taxpayer support from the housing GSEs before the bubble bursts and
taxpayers are once again forced to bail out investors misled by foolish
government interference in the market. I therefore hope my colleagues
will stand up for American taxpayers and investors by cosponsoring the
Free Housing Market Enhancement Act.”