Mortgage bailout sends good money after bad

So Congress creates a couple of quasi-independent corporations, backed by taxpayers' money, to encourage mortgage lenders to make loans they wouldn't normally make on their own. Largely as a result of these questionable loans, the mortgage market goes tits-up, and those quasi-independent entities, Fannie Mae and Freddie Mac, find themselves on the financial ropes.

Oh, and Fannie Mae and Freddie Mac have a history of financial shenanigans, often covered up by carefully courted political protectors.

So, what should Congress do with the aftermath of this failed and very expensive gambling in creative finance?

Double down, of course! Having leveraged their connections to the public purse to create the current mess, Fannie Mae and Freddie Mac have now been thrown a multi-billion-dollar lifeline of taxpayer funds to "fix" the problem.

To accommodate the staggering cost, Congress plans to raise the national debt limit by $800 billion to $10.6 trillion.

You can probably disregard the "official" $25 billion price tag attached to the bailout. As the Wall Street Journal editorialized, "The CBO says this could cost $100 billion, or it could cost 'nothing.' So it threw a dart at the wall and assigned a $25 billion price tag to the Fan and Fred bailout." That's in addition to the $300 billion slated to buck-up distressed loans through the Federal Housing Administration.

What wise guardians of the public trust are our lawmakers, and the president poised to sign off on this fiasco.