The US Government Bails Out Freddie and Fannie

How much was the debt when Clinton took over? How much when he left?

You made the statement, back it up with credible sources, because I believe that's another misrepresentation.

Please don't say you give Clinton the credit for the short lived Budget surpluses in the 90's, or worse yet that you actually think we used one penny of the surpluses to pay of any of the debt.

BVB
Brian

China holds roughly $600 billion in agency debt, Russia $400 billion. It is likely that diplomacy played a pretty big part in the decision to backstop the debt. Also, there is a worry about a dollar crisis if there is significant losses in the agency market, as even the perception of selling could tank the greenback.

.
.
.

American mortgage holders have been paying a risk premium to investors of agency obligations (currently about 100 basis points above long term treasuries). But a risk premium for what (assuming a bailout is in the cards)? Conducting a bailout of the creditors will result in not only mortgage holders paying more than they should have, but it will milk the US taxpayer as well. That is, the US taxpayer would be subsidizing the risk taken by these investors (many of them foreign). At the very least, this subsidy should be removed from the amount of the bailout (foreign investors should not receive more than the long term treasury rate if they are in fact being backstopped by the US government). If the creditors of Fannie Mae and Freddie Mac do reap the benefits of a bailout, it will be interesting to see the public reaction to the foreign investors being rescued at the expense of the public.

Brian