"The Only People Who Still Might Be Fooled Are the American Taxpayers, Who Are Ultimately Respo

03/24/2010 • By Washington's Blog, washingtonsblog.com

The Wall Street Journal ran an editorial last August pointing out that the American people are just about the only ones fooled by the government's use of off-balance sheet, SIV-type accounting to hide the debts of Fannie, Freddie, Social Security and Medicare: The bigger issue is that all of Fan[nie] and Fred[ie]'s liabilities, whether kept inside the companies or hidden in a dark corner of the Treasury, are now Uncle Sam's responsibility. Moving their bad assets into a new Baddie Mae would only preserve the fiction that there is a difference between the government's obligations and those of Fan and Fred. Not even Barney Frank could believe that any more. *** For the moment, despite 80% government ownership, their $85 billion bailout cost (with more losses to come) and their $5.4 trillion in taxpayer liabilities remain off-balance-sheet in the mold of Enron's special purpose vehicles or Citigroup's SIVs. The politicians who created and pampered Fan and Fred like it that