Just when you were thinking it just couldn’t get any higher…The current administration let you know that you were right. According to current projections, the cost of rescuing government-controlled Fannie Mae and Freddie Mac will sink as they are slowly phased out of existence, the Obama administration announced today. While the “rescue has cost $131 billion to date, by 2021 keeping the two GSEs afloat will have cost “only” $73 billion as the defunct entities pay dividends back to the Treasury Department. And, in even more good news, that $131 billion is much lower than some estimates which were as high as $685 billion.
According to White House estimates, by 2013 the GSEs will be paying more back to the Treasury than they are taking in and by 2014 they will no longer need funding. Any proposals to scale back Fannie and Freddie or the government’s involvement in their management are projected to take five years or longer.
Does this sound like good news to you? Do you think that the government will really let Fannie and Freddie go and should they do so?
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