and all through the country, people were paying more attention to Christmas than they were to the government and to the financial mess that is making our country struggle.
So what did the Treasury do? They did two things:
- They expanded the nationalization of Fannie Mae and Freddie Mac from $200 Billion each (that’s $200,000,000,000) to an unlimited amount of funding. In other words, the US Treasury just handed their checkbook to Fannie Mae and Freddie Mac.
- They did it on the day when no one was watching and they did it 9 days before it would have required congressional approval.
How nice and how timely.
Nothing to see here, move along, move along……
That was a nice holiday gift to taxpayers.
As expected, the Treasury on Christmas Eve increased the amount of money it can plow into Fannie Mae and Freddie Mac to keep them solvent. Before, the U.S. had pledged up to $200 billion to each. Now, over the next three years, the Treasury can spend as much as is needed to prevent their net worth going negative. Such a change would have required congressional consent after Dec. 31. Given that each U.S. household had effectively committed $3,800 to both firms, the Treasury should have waited till the New Year so the people’s representatives could have had their say.