<p>A nice bet the taxpayers are making… Let’s see, if you come out whole in 10 years, do you really come out whole? </p>
<p>Ask your kids. ;)</p>
<p><a href=“Bloomberg Politics - Bloomberg”>Bloomberg Politics - Bloomberg;
<p>"Even as the Bush administration insists it won’t risk public funds in a bailout, American taxpayers may already be liable for billions of dollars stemming from Federal Reserve and Treasury efforts to quell a financial crisis. </p>
<p>History suggests the Fed may not recover some of the almost $30 billion investment in illiquid mortgage securities it received from Bear Stearns Cos., said Joe Mason, a Drexel University professor who has written on banking crises. Treasury’s push to have Fannie Mae and Freddie Mac buy more mortgage bonds reduces the capital the government-chartered companies hold in reserve at a time when foreclosures and defaults are surging. </p>
<p>Regulators <code>are playing with fire,‘’ said Allan Meltzer, a Fed historian and economics professor at Carnegie Mellon University in Pittsburgh.</code>With good luck, none of these liabilities will come due. We can’t expect that good luck, and we haven’t had it.‘’ </p>
<p>Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson were forced to respond after capital markets seized up and Bear Stearns faced a run by creditors. In an emergency action that jeopardizes the dividend it pays the Treasury, the Fed authorized a $29 billion loan against illiquid mortgage- and asset-backed securities from Bear Stearns that will be held in a Delaware corporation. JPMorgan contributed $1 billion."</p>