Fannie, Freddie Lose Relevance | Arnold Kling | Cato Institute: Commentary

Fannie, Freddie Lose Relevance | Arnold Kling | Cato Institute: Commentary: "To achieve this gradual phase-out, the provision of government mortgage support will need to be rationed in some way. It can be rationed by price, with the agencies raising their fees until private firms are able to compete. It can be rationed by quantity, with limits imposed on the market share of the agencies. And it can be rationed by market segment, with the agencies prevented from purchasing certain types of mortgages.

The administration report includes suggestions for all three types of rationing."