Amid public distraction during the Yuletide season last year, the Obama administration lifted the bailout caps of $200 billion each for Fannie Mae and Freddie Mac. Then government's economic whiz kids ignored the moribund mortgage giants in their ham-handed attempt to reorder financial regulations.
Today Freddie and Fannie still are hemorrhaging with losses of $8 billion and $11.5 billion, respectively, reported this year. And each is asking for more bailout cash: $10.6 billion and $8.4 billion.
Never mind that these twin compressors of calamity inflated the housing bubble that led to catastrophe in 2008. Or that together they still owe almost half -- 45 percent -- of outstanding bailout money paid out to the various recipients of government's "rescue."
Exactly how does Big Government end taxpayer bailouts when it enables both sinkholes?
As James Gattuso and David C. John of The Heritage Foundation detail in a USA Today op-ed, Fannie and Freddie are unsustainable. Their own officials warn that their financial misfortunes aren't going to change anytime soon. And now Team Obama is dangling the carrot of reform ?
The solutions suggested by Messrs. Gattuso and John are to wind down, break up and sell off Fannie and Freddie. Anything less is akin to playing Russian roulette with the economy -- with a fully loaded revolver.
