Should there be a public option for the credit market?

[Torie]

It sounds like crony capitalism gone wild.  Just why anyone would think the government would engage in appropriate underwriting without politics getting involved, and the program not ending up being a Fannie Mae like fail on steroids, escapes me.

By the way, the government has a cost of capital too, so the government doing it at "no profit," while sucking up some uncompensated risk, means that it is a subsidy to the borrows right off the bat. In economics lore, a "normal" profit means that amount of expected return which will attract capital to cover the higher risks involved that just buying short term treasury bills (the risk free rate), and no more. "Profit" is all too often treated as a dirty word, which is unfortunate. It is what makes the world go round.

[Torie]

Just why anyone would think the government would engage in appropriate underwriting

You think 'private' business does this??

Is the Pope Catholic? Sure, relatively speaking.