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Problematic GSE Bailout

As far as I can tell this move is triggered by exactly the lack of confidence by the bond markets that the author of the article is advancing as a good thing. It is mostly a emotional reaction at a fairly late stage in a financial upheaval. The actual cost it taxpayers is not "hundreds of billions of dollars". Freddie and Fannie are losing about 1 billion per month between them, far less than say the big three automakers who are next up for a bailout.

This is a smart move because of the fear in the market, and the connectivity that the Freddie and Fannie have with other important money flows. The cost to the taxpayer is far outweighed by the impact that this takeover will have.

While it may not put an end to the problems in the current economy, it does put an end to the doomsday scenario and the possibility of another Great Depression.