Posted on 02/02/2010 8:07:24 PM PST by dubie
The record budget deficits announced by the White House on Monday fail to include the federal governments share of Fannie Mae and Freddie Macs $6.3 trillion in liabilities though the Director of the Office of Management and Budget once thought it should.
Following a 2008 bailout that made the government a majority stakeholder in the mortgage companies, then-Congressional Budget Office Director Peter Orszag said, Now that the authority is indeed being exercised, it is CBOs view that the operations of Fannie Mae and Freddie Mac should be directly incorporated into the federal budget.
Doing so reflects a very tight nexus between the firms and the federal government and the degree of control being exercised by the federal government over their operations.
The government bailed out Fannie and Freddie by buying preferred stock, infusing the two firms with capital. The 2011 budget reports that the government has spent $110.6 billion on Fannie and Freddie to date; in December, the Treasury department said it would buy more than $400 billion in preferred stock if their losses grow.
The government now owns 80 percent of the companies. While Fannie and Freddie together are liable for more than $6 trillion in mortgage securities, the government has not reflected that it might be on the hook for a significant percentage of those securities.
(Excerpt) Read more at dailycaller.com ...
From the same commie that wanted to “unhide” defense spending, so switched to the other budget spreadsheet...now hiding the true deficit by pretending those liabilities don’t exist.
Have another ice-cream cone, Barry Boy.
bttt
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