Troubling Trilemma

Fannie and Freddie are trying to do three things simultaneously; raise and protect their capital, generate a good rate of return for future investors, and in the public policy sphere, boost affordable housing and protect taxpayers. The problem, they can only achieve two of these objectives concurrently. For example, raising capital to protect taxpayers reduces returns. Alternatively, focusing on affordable housing goals and boosting returns hurts taxpayers. Privatization, maybe not.

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