"Bachmann’s Latest Whopper: ‘The Federal Government Literally Owns Banks’"
Part of Rep. Michele Bachmann’s (R-MN) argument that President Obama has allegedly turned the United States into a socialist, totalitarian state is her claim that since he took office, the federal government has taken control of the “private economy.” First, the feds allegedly owned 30 percent of the private economy, then she recently upped it to 51 percent. “Once the president signed the health care bill…that effected 51% government takeover of the private economy,” she said last month. Last night on CNN, Bachmann tried to explain her reasoning and in doing so, threw in a new tall tale:
BACHMANN: The story in our country has been the federal government takeover of private industry. The federal government literally, in 18 months’ time, has taken either direct ownership or control of 51 percent of the private economy. Eighteen months ago, 100 percent of the private economy was private. But today, the federal government literally owns banks., the largest insurance company in the United States. The federal government owns over half of all home mortgages today in the United States — Chrysler, G.M. the student loan industry and now health care.
One problem for Bachmann’s argument is that the U.S. government doesn’t own any banks. Anything that might come close to making this claim true would be the existence of the Federal Reserve, which has been around since the early 20th Century. She could perhaps be referring to the bank bailouts (which happened under President Bush). But even in this case — while the U.S. government’s influence on American financial institutions has certainly increased since TARP — its ownership in any of the nation’s banks is paltry (6 percent of Bank of America and 7.8 percent of Citigroup as of early 2009, for example). And, it is helping the banks to get back on their feet while earning a profit for taxpayers.
The private and public portions of an economy fluctuate over time, depending on the needs and policy decisions of the era. But at the end of the day, this year’s private economy is 100% private, too. The private economy of 1928 was also 100% private. And even in 1945, in the midst of heavy defense spending and regulations from World War II and the New Deal, the private economy was 100% private!
Even giving Bachmann the benefit of the doubt, “total government expenditures haven’t been near half of GDP since 1944″ and “in 2009, they were 20.9 percent.” Bachmann went from 30 percent of this alleged government ownership to 51 percent because health care reform passed, but as FactCheck.org noted, “[W]e’ve said time and again, the government isn’t ‘taking ownership’ of health care. Insurance will still be provided by private companies, and care will still be provided by private doctors.”