Fannie and Freddie Should Pay Dividends to the Taxpayers Not the Treasury Department

I read with interest Matt Zeitlin’s piece on Freddie Mac’s latest earnings report and how basically the GSEs are back to making money and paying net  to the Treasury. His bottom line:

So far both companies have received a combined $187 billion from the Treasury and given back about $47 billion in dividend payments. As the housing market improves and the GSEs standards stay tight, the second number should start to grow steadily higher. The taxpayer will likely not be made whole on its “investments” in Fannie Mae and Freddie Mac. But four years after the government came riding to the GSEs rescue, we can finally draw a line on the taxpayers’ housing liability.

Now in this context “the taxpayer” is metonymy for the U.S. Treasury. Fannie and Freddie aren’t giving me any money. But maybe they should. Having the GSEs remit their dividends to the taxpayers as checks mailed out to American citizens would be sounder economic policy. Given the ultra-low interest rates currently prevailing, the Treasury doesn’t actually need this money. Redirecting it straight to the American people might be a politically feasible form of stimulus.