Government Supported Enterprise

GSE's as they are known, like Fannie Mae and Freddie Mac, are quasi-private enterprise. The reason it is not appropriate to refer to them as quasi-public enterprise is because the underlying legitimacy that is fundamental to the power structure of enterprise is the ownership of private property.

The question posed is fundamental: should the legitimacy of enterprise be fundamentally "switched" from state capitalism to state socialism?

Operationally there would be little difference, and both claim the legal, constitutional, legitimacy of the popular consent of the governed.

Nationalizing Fannie and Freddie would be a switch to state socialism. The institutions would be funded by means of public finance, directly by the government through the treasury and not through the Federal Reserve which is financed through private banks (private ownership of capital, or property). The public debt, for example, is held publicly but paid privately through the Federal Reserve system. The interest on the debt is paid publicly through taxation (consent of the governed) and the treasury.

A person that owns enough capital (savings) to privately own (buy) the public debt and collect interest and is taxed to pay it is essentially sending themselves a check in the mail. In order to avoid this contradiction, this financial dissonance, we have the Federal Reserve "system" and all manner of regressing the tax code into a complexity that is always demanding simplicity like a flat tax, which will be a regressive burden by popular consent.

It is not difficult to see that "the system" is organized to be overly complex and requires central management of a controlling bureaucratic authority that is not necessarily elected and accountable to the consent of the governed, but operates in a supra-sovereign fashion that demands "the switch" to achieve the legal public legitimacy of authority.

Nationalization is not in this way the deliberate folly of the masses to secure a free lunch, but the natural process of satisfying a constitutional legitimacy. It does not mean "the switch" from private to a purely public legitimacy will not be corrupted, but that it will naturally occur despite the deliberate systematic organization to prevent it, which entrenches its inevitability by its own organizational devices.

Being assured direct accountability of any organized means of power by the consent of the governed requires deconsolidation of power (deliberately organized pluralism), not just a change of its legitimacy which is easily manipulated and the civility of its liberty easily denied by a centralized power of authority be it public or private.

Very best wishes.