For another, the pair are growing so fast that they now threaten to consume the entire mortgage market, doing the damage of classic monopolies. Fannie and Freddie's assets are held by so many US banks that their weakening would pose the threat of systemic risk. It is possible they would require a federal bail-out. But the biggest danger is America's emerging federal surplus. High on the list of likely purchases are Fannies and Freddies.
Governments ought to be able to unload such assets when they are no longer a good investment.
Not that Fannie and Freddie are the only firms facing the danger of increased politicisation in the surplus world. JWR contributor Amity Shlaes is a columnist for Financial Times . How Taxes Drive Americans Crazy and What to Do About It . Send your comments by clicking here.