Photopaper: 1.3 Government Sponsored Enterprises

During the Great Depression, the US government, with President franklin Roosevelt at the helm, launched Fannie Mae and Freddie mac to help a greater number of Americans become homeowners. These two organizations helped make mortgages more available. Fannie Mae remained part of the federal budget until 1968, when President Lyndon Johnson was facing big deficits due to the Vietnam war (NPR, 2011). Fannie was eventually spun off, as its own division, a hybrid between government financial backing with profit-oriented leadership. In section 2.3 we will take a more in depth look at how the GSEs Fannie Mae and Freddy Mac have been a key component to the global economic crisis.

Thus far we have discussed a few of the weaker variations of SOEs. PPPs, GLCs, and GSEs all have elements of private companies combined with traces of government interaction. The following variation of nation-corporation leaves no space for dispute; we have arrived at 100% State Owned Enterprise.

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