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As bailouts go, nothing quite matches the torrent of taxpayer money still pouring into Fannie Mae and Freddie Mac, the housing giants that now guarantee nearly half of the nation's $11.7 trillion in mortgages.
OPPOSING VIEW: Go back to the old design
To cover loans that go sour, the federal government has already doled out almost $145 billion, and the non-partisan Congressional Budget Office estimates the final tab will be about $381 billion. That's about half the size of the 2008 bank bailout but, unlike that bailout, most of this money won't get paid back. And even now, there's little talk in Washington about how to fix the problem.
Fannie and Freddie can't be allowed to collapse. The fragile housing market would collapse along with them. Nor can they go forever as wards of the state, soaking up taxpayer cash. They also should not be allowed to go back to their unusual former status as publicly traded companies that are also "government-sponsored enterprises." That's why they got in trouble in the first place, paying outsized compensation and backing risky mortgages because politicians of both parties prodded them to do so.
Fannie and Freddie need to be rethought entirely, if not eliminated outright. And the time to start planning for that is now.