The Bailout Of Freddie And Fannie That's Not A Bailout

George Bush denied that the federal assistance to the two mortgage giants was a federal bailout. So I am confused as to what to call the $25 billion dollar tab that the American taxpayers are picking up to save the two companies (that were started with government money btw). The woes of the mortgage industry continue to ripple across the national and even international economy. To counter bad times, the President expects the taxpayer to pick up the tab, instead of the greedy corporations that helped to start the mess we are in. Of course, the hook to this is that they say it probably won't be needed.

From The NY Times:

The budget office said there was a better than even chance that the rescue package would not be needed before the end of 2009 and would not cost taxpayers any money. But the office also estimated a 5 percent chance that the mortgage companies, Fannie Mae and Freddie Mac, could lose $100 billion, which would cost taxpayers far more than $25 billion.

But what do they really know?

Mr. Orszag, at a briefing with reporters, acknowledged that pinpointing the eventual cost of the package was impossible. “There is very significant uncertainty involved here,” he said.

So if our "investment" works out it'll be good for us, right?

Mr. Orszag said that the analysis by his office did not distinguish between the different forms of aid that might be offered — a credit line or a stock purchase — and that the analysis showed no short-term potential financial benefit for taxpayers even if Fannie Mae and Freddie Mac perform well.

But he said the analysis found substantial risk for taxpayers if the companies had steep losses and would not say if his office had analyzed the implications of a full government takeover of the companies.

Ah so we're basically screwed either way, and guess who the winner in all of this is? The executives in the custom-tailored suits that have run this ship too close to shore. The only question is how close will it get before irreparably damaging the economy.