As you can tell simply by scanning the headlines of any major newspaper in the United States these days, something is gravely amiss in the current political debate in this country.

You see - along with the presidential palaver and front-page pieces about pigs and lipstick - stories about a metastasizing financial crisis facing the country. The U.S. government just bought a huge pig in a big poke this week - it's not a joke, and it should not be on the U.S. taxpayer.

Whatever the outcome of the country's mortgage and broader credit crisis, this much is now clear: American taxpayers and voters need to know what is at stake for them in the government seizure of Freddie Mac and Fannie Mae, what risks they face, and what the policy choices are.

Fannie Mae was established by President Franklin Delano Roosevelt in 1938 to ease access to homeownership financing. It was privatized in 1968 to keep its balance sheet off the books of a federal budget sunk into deficit by the Vietnam War. In 1970, Freddie Mac was created as a supposed competitor enterprise. However, both were supported by an implicit guarantee from the U.S. government to pay their debts at taxpayer expense in the event they ever became insolvent.

In fact, however, American real estate prices escalated steadily for decades, Freddie and Fannie prospered, homeownership rates grew, and no one ever seriously thought this guarantee would ever be tested.

Treasury Secretary Henry Paulson announced last Sunday that the government had seized control of Fannie Mae and Freddie Mac. To keep these firms and the real estate market afloat, the government said it would make available a $200 billion infusion of taxpayer money.

Freddie and Fannie stock is traded on capital markets around the world. Vast qualities - hundreds of billions of dollars worth of these firms' debt - is held by global central banks, principally in Japan and China. The markets have battered their stock this year - after trading near $70 a share a year ago, Fannie and Freddie equities have now been reduced to penny stocks in the last few weeks. The spreads between Freddie and 10-year Treasury bonds is up 100 basis points during the same period. Japan and China are curtailing their purchase of Freddie and Fannie paper, and stock investors do not want to catch what Wall Street calls the "falling knife."

The crisis is not confined to Freddie and Fannie. One of the venerable Wall Street investment houses, the 158-year old Lehman Brothers, overexposed in the slumping real estate market, is daily and desperately seeking to stave off liquidation. Other major financial institutions are starved for capital.

With the subprime, alt-A, and consequence foreclosure crises continuing to gather steam - well over a million American homes have already gone into foreclosure in 2008 - private mortgage financing has dried up to the point where Freddie and Fannie now own or guarantee close to 75 percent of the nation's outstanding $12 trillion mortgage market. The entire U.S. economy is $15 trillion annually. If the firms collapse, so too will the market, with unimaginable economic and, in an election year, political consequences.

Last summer, when the first signs of a bursting real estate bubble appeared, and through the winter when talk of recession was first heard, and even into the spring, when Congress reacted by passing the economic stimulus package, Secretary Paulson acted - or, rather, did not act - on the assumption that no short-term action was necessary to forestall the foreclosure crisis or address the country's outdated system of financial regulation that allowed the bubble to balloon unchecked.

That assumption may no longer be valid.

The 'conservatorship' - think of receivership in the bankruptcy context - into which Paulson has put Freddie and Fannie for a time is not a tenable long-term solution to the question of what is to be done with these government-sponsored enterprises.

The historical mission of Freddie and Fannie - to increase homeownership among the American middle class - remains an important public policy objective. The fact that it has been accomplished (homeownership rates in the U.S. have hovered at 65-70 percent for years) is one of the distinguishing hallmarks of American economic life.

Some might feel a need to discuss pigs or lipstick or other distractions from the real issues facing Americans. At a time when folks feel steadily increasing pain at the pump and in the pocketbook, this is a serious disservice to the American people.

What pocketbook price is to be paid for pursuing this mission by propping up Fannie and Freddie? How much more debt should the nation take on? How much burden can - or should - taxpayers ultimately be asked to bear to do so? How else this objective might otherwise be accomplished? This is a set of enormously important economic policy questions that needs to be addressed during the course of the presidential debate - otherwise, decisions may be made on behalf of the American people but without their informed consent.