Felix Salmon gives Dan Gross a good spank

which the latter seems to really need:

Here's Gross:

Until this week, the cost of this benefit has been effectively nothing--save for some foregone taxes and the cost of regulating the companies.

Effectively nothing? The cost of the implicit guarantee is not foregone taxes, it's foregone profits. The US government has essentially been insuring the debt of the GSEs against default, while neglecting to charge any insurance premiums.

And now that the guarantee is explicit rather than implicit, just look what's happened to US sovereign debt:

This is the first time in my career that I truly believe U.S. Treasury bonds sold off on credit concern. By this I mean, the credit of the U.S. Government. Long time readers know I'm not an alarmist type, and I'm sure not saying the United States is going belly up, but credit default swaps on the United States of America moved 11bps wider today (from 9bps to 20bps). The 10-year Treasury moved 15bps higher. All on a day when people are scared shitless and there should have been strong demand for "risk-free" assets.

That's a real cost, Dan. It might not be a line item in any GSE bailout, but when the US has to pay more money to roll over its trillions of dollars in liabilities, every basis point counts.