The Associated Press reports that the House passed a bill that will increase the amount of debt available to buy houses. In the process, it will make the U.S. a much riskier place to invest. That's because when a country's debt tops 60% of its Gross Domestic Product (GDP), lenders consider it a risky credit. The House bill will lift the U.S.'s ratio to 75%. And the dollar will continue to plummet.

Of course, the bill is not being sold that way. Instead its stated goals are to help 400,000 people with foreclosures and to save Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE). Here are six key provisions according to AP:

• Puts distressed real estate on the government's books - Provides $3.9 billion in grants for "devastated neighborhoods" -- a provision the White House hated since it looked like the S&L bailout's RTC, that Bush I approved.
• Gives Paulson unlimited Fannie/Freddie bailout power - Gives the Treasury Department an unlimited line of credit to bail out Fannie and Freddie and to buy an unspecified amount of their stock.
• Creates new debt for drowning borrowers - Lets 400,000 foreclosing homeowners refinance into more affordable, fixed-rate loans backed by the Federal Housing Administration (FHA).

• Raises national debt to 75% of GDP - increases the statutory limit on the national debt by $800 billion, to $10.6 trillion -- GDP is $14.2 trillion.
• Increases the budget deficit to encourage more mortgages - Provides $15 billion in housing tax breaks. As AP said, the bill includes a "credit of up to $7,500 for first-time buyers who purchase homes between April 9, 2008, and July 1, 2009."
• Creates a new regulator - The new regulator will have approval power over how much Fannie and Freddie executives get paid.

Let's be clear about what's going on here. Washington is using our money to keep the Wall Street gold mine of securitization going. This will be a big boost to investment banks and institutional investors who buy mortgage-backed securities. It will also boost inflation, since it will make the U.S. even more heavily indebted than it was before. The value of the dollar will drop even further than the 72% it's tumbled already.

And the middle class will be left holding the bag for a flawed securitization factory that has cost us $8 trillion in lost wealth. Does that sound good to you?

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.