November 21, 2011
Bailout Update: Fannie Mae and Freddie Mac
In 2009, the federal government predicted that by 2011, the government not only would no longer need to inject taxpayer money into the GSEs and would earn $7 billion per year in income thereafter. A couple weeks ago, Freddie Mac posted another loss, fell below the solvency threshold and asked for another $6 billion to keep the company solvent.
To date, the taxpayer has injected $170 billion in capital into Fannie Mae and Freddie Mac. Don't worry, though, the executives of Fannie and Freddie recently took $30 million in bonuses. What better incentive to fail if you're getting paid like that and if the company becomes insolvent, simply go to Congress and ask for more money!
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