I can remember people making similar arguments before the last crisis. It turned out we had to put not only bailout Fannie and Freddie, HUD's mortgage programs and the entire mortgage banking industry but also create a price support program for mortgage securities.
If the guarantees really cost nothing or are profitable, the US should stop making them. They create all kinds of distortions even if it averages out.
But it's the fact that all the particpants (banks, agencies, etc) want them so badly makes it clear how valuable they really are.
If the guarantees really cost nothing or are profitable, the US should stop making them. They create all kinds of distortions even if it averages out.
But it's the fact that all the particpants (banks, agencies, etc) want them so badly makes it clear how valuable they really are.