Thursday, February 19, 2009

More Money?

The bailout procession continued yesterday, with an announcement from the Obama administration regarding a new "housing bailout" to the tune of $275 Billion. We note with some amusements that the Administration has attempted to characterize this as a $75 Billion measure. The $200 Billion for Fannie/Freddie is being treated (in mainstream media outlets) similar to a (illegitimate) child support payment that is too embarrassing to be discussed at the company Christmas party. Without debating the efficacy of the measures outlined by this specific plan, we would like to make two observations.
1) When crafting the "original" stimulus package, lawmakers were careful to keep the final price tag well under the psychologically incendiary amount of One Trillion Dollars. Congress apparently went with Plan B, which was to craft two smaller bills, and hope that nobody pointed out how quickly they had managed to spend an entire Trillion Dollars.
2) Why do Fannie/Freddie still exist in their present form? These bloated monsters make Citigroup look like a healthy institution. The Administration would be well served to design a "Fannie Mae exit strategy", less these two Frankensteins of Government creation continue to hemorrhage billions of dollars.
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