Another legacy of the deregulation efforts by McCain and the Republicans.
Where will the money come to buy the mortgage-paper?
The funds are going to be borrowed by Treasury and it will be repaid over decades by taxpayers.
As a result, the deficit for next year, fiscal 2009 that starts October 1, is likely to jump to an eye-popping record range of $800 billion to one trillion dollars, according to Stan Collender, a long-time budget analyst.
Earlier this month, before the government nationalized Fannie Mae, Freddie Mac and the giant American Insurance Group, the Congressional Budget Office forecast the deficit would rise to $438 billion next year.
For 2008 fiscal year, which ends at the end of the month, the CBO forecasts a $407 billion deficit.
The war in Iraq is costing roughly $180 billion per year. The price tag on the war is approaching $800 billion, Collender said.
All of this spending will crowd out private investment, some economists said.
And it comes at a time when Congress must also take steps to close the gap between revenues and promised benefits for Medicare and Social Security.
