Fannie and Freddie Should Pay Dividends To The Public

Acting Director of the Federal Housing Finance Agency, the conservator for Fannie Mae and Freddie Mac, Edward J. DeMarco testifies during a hearing on ‘Sustainable Housing Finance’ before the House Financial Services Committee in Washington, DC, March 19, 2013.

Photo by JIM WATSON/AFP/Getty Images

Fannie Mae and Freddie Mac are currently owned by the U.S. government after needing a substantial financial bailout back in 2008. But these days they’re making money. Quite a lot of money, in fact, and as a result they’re paying huge dividends. Just yesterday, Freddie Mac sent $4.4 billion to the Treasury.

Now in theory since both Democrats and Republicans want to end the conservatorship situation and reform housing finance in a comprehensive way, this should come to an end soon. But of course in practice Democrats and Republicans aren’t going to agree on anything. The House GOP has a bill that’s so extreme it may not be able to secure a majority in the House, and there’s a bipartisan bill in the Senate that may not be able to get 60 votes, and even if both of them could pass they’re totally incompatible with each other. In other words, it’s business as usual in Washington.

That means we ought to think about how to make conservatorship work better. What if instead of giving $4.4 billion to the Treasury (boring!) Freddie Mac sent $15 to each American? I like money. You like money. That’s obviously not a lot of money, but it’s better than nothing. And for the most economically struggling families, an extra $15 per person could be really nice. It’d stimulate the economy in a small way, and it would do so without bureaucracy or “big government” or whatever. Why not?