The Dept. of Treasury takes over Fannie Mae and Freddie Mac

Look out boys and girls, your free market loving Republican government just put you, me and everyone else on the hook for who knows how many billions of dollars because the two failing mortgage giants are deemed too big to fail.

Treasury Secretary Henry Paulson is betting that providing fresh capital to the two firms will eventually lead to lower mortgage rates, spur homebuying demand and slow the plunge in home prices that has ravaged many areas of the country.

The huge potential liabilities facing each company, as a result of soaring mortgage defaults, could cost taxpayers tens of billions of dollars, but Paulson stressed that the financial impacts if the two companies had been allowed to fail would be far more serious.

Privatize profit and socialize loss – this is going to be so awesome, I can’t wait to see how the bet turns out.