Business: Fannie Mae and Freddy Mac = Black Holes for Tax Dollars?

The politically correct targets these days are: the bankers, the insurance companies, the oil drillers ... they are indeed blame-worthy.

But I came across this news item ...

Excerpt:
Fannie Mae has again asked taxpayers for more money -- this time $8.4 billion -- after reporting another steep loss for the first quarter. The taxpayer bill for rescuing Fannie and its sibling Freddie Mac has grown to $145 billion -- and the final tally could be much higher.

The rescue of Fannie and Freddie is turning out to be one of the most expensive aftereffects of the financial meltdown, and Fannie Mae's first-quarter financial report on Monday made clear that there is no end in sight.

Where is the outrage here?

Could it be that because these two are GSE (government sponsored entities), they are getting a free pass because the paradigm of the political and media elites is "private business is evil and government is good?"

How big might the bailout get you ask?

Late last year, the Obama administration pledged to cover unlimited losses through 2012 for Fannie and Freddie, lifting an earlier cap of $400 billion.

I take this to mean, they think it could exceed $400 billion?

And to think, this bailout could be bigger than the bailout of a whole country!

From the last news item I saw, the Greece bailout is at $140 billion.

Am not an economist, but one wonders if there is an alternative to these massive bailouts?

Is there a template for handling bankruptcies of nations (Greece and other nations teetering on the edge) and massive government sponsored entities (Freddie and Fannie)?

More on Fannie and Freddy ...

NTY excerpt:
Peter J. Wallison, a fellow in financial policy at the American Enterprise Institute, said it was true that the government could do nothing to stem the losses in the short term, but that it was a mistake not to decide the companies' future as soon as possible.

"Right now we have a consensus that something needs to be done," Mr. Wallison said. "The sensible thing to do is to put Congress in a position where they have to act within a certain period of time."

Pushing the debate into the future, he said, created the risk that Congress would pass the present bill, congratulate itself on addressing the financial crisis, and lose its appetite for the difficult question of what do about Fannie and Freddie.

WaPo excerpt:
As the Senate resumed debate Monday on legislation to overhaul financial regulation, leading Republican lawmakers are pushing an amendment that would wind down the government-controlled mortgage finance giants Fannie Mae and Freddie Mac.

The proposal by Sens. John McCain (Ariz.), Richard C. Shelby (Ala.) and Judd Gregg (N.H.) calls for the government to end its control of the companies within two years. Under the amendment, Fannie and Freddie would have to reduce the size of their mortgage portfolios and begin paying state and local sales taxes.

Congressional aides say the amendment is unlikely to pass. But as Congress argues over what to do with Fannie and Freddie, the hole burns deeper at the companies. Fannie reported Monday that it lost $11.5 billion in the first three months of the year and needed $8.4 billion from taxpayers to stay afloat.