US Government Takes Over Fannie and Freddie

“There is a consensus today that these enterprises pose a systemic risk and they cannot continue in their current form. Government support needs to be either explicit or nonexistent, and structured to resolve the conflict between public and private purposes.” - Treasury Secretary Henry Paulson

In an effort to re-stabilize the housing market and US economy as a whole, the Bush Administration has decided to take over and restructure Fannie Mae and Freddie Mac. While many in the Real Estate business are probably thrilled, I think long term it is very dangerous for the government to have this much control over the majority of mortgages, and for American taxpayers to now shoulder the risk of these companies failing. It seems to be a short term decision to bolster the economy which we might regret in the long term.

Good article explaining the takeover: http://www.nytimes.com/2008/09/08/business/08fannie.html?pagewanted=1&_r=1