Fannie Mae and Freddie Mac: This bailout has been years in the making

As most readers of this blog are probably aware, I used to work in Washington with the National Taxpayers Union, which is dedicated to lower taxes, less government spending, and tax reform. For years, my colleagues at NTU and I were voices in the wilderness telling Congress that government-sponsored housing giants Fannie Mae and Freddie Mac were in need of reform.
To his credit, President Bush has repeatedly attempted to reform Fannie and Freddie to make a bailout less likely and wean these two mortgage giants off the taxpayer teat, but to no avail. After all, Fannie and Freddie toss money around Washington ($200 million over the last decade) like it grew on trees. Of course, when you are implicitly backed by the US Treasury and you are competing against banks that are not, money does grow on trees.
Unfortunately, Washington did not act and now, due to the difficult housing market, the chickens are coming home to roost and taxpayers are on the hook for what could be billions in bad debt owned by Fannie and Freddie. Just the latest reason that government should not get involved in business.

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