CNN Money: Tammy Luhby- 'Will FHA Be The Next Big Government Bailout?'

Source:CNN Money- the bankrupt Federal Housing Administration.

"Continued trouble in the housing market has further eroded the Federal Housing Administration's reserves, leaving it with a very thin cushion to protect it against future financial losses.

And should housing values continue to plummet, the agency may have to turn to taxpayers for a bailout, according to its annual report, which was released Tuesday.

The agency's reserves fell to 0.24% in fiscal 2011, down from 0.5% the year earlier, according to independent estimates in the report. This ratio measures the net worth of the reserve fund compared with the value of the loans FHA has insured." 

From CNN Money

The Federal Government has a history of setting up enterprises that are somewhat self-financed and independent. But really aren't because the Federal Government still has a role in its management. 

The Postal Service, the Federal Housing Administration, Amtrak, Social Security, and Medicare aren't bankrupt yet. But both are in need of reform to avoid that same thing with Medicaid down the road. And the 2010 Affordable Care Act that I by in-large support, makes Medicaid financial outlook even worse. Because it adds millions of people to Medicaid without a way to pay for it. 

Medicaid is Health Insurance for low-income people, who can't afford to pay for their health insurance, so the revenue is going to have to come from somewhere else. 

FHA, Freddie Mac and Fannie Mae are what's known as government sponsored enterprises (or GSE) which is the big part of the problem right there. 

Government shouldn't be in the business of sponsoring enterprises, especially in a capitalist economy like America. Government is not a for-profit organization, but a public service designed to serve, not to make money and collects revenue to do those things, not to make money. Doesn't mean it should run debt and deficits either, but they are not in the business to make money. But to serve the people that they represent.