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Title: True Cost of Fannie, Freddie Bailouts: $317 Billion, CBO Says
Source:
CNSNEWS
URL Source: http://www.cnsnews.com/news/article ... fannie-freddie-bailouts-317-bi
Published: Jun 6, 2011
Author: Matt Cover
Post Date: 2011-06-06 19:08:55 by CZ82
Keywords: None
Views: 10411
Comments: 18
True Cost of Fannie, Freddie Bailouts: $317 Billion, CBO Says Monday, June 06, 2011 By Matt Cover CNSNews.com) – The Congressional Budget Office (CBO) says the real cost of the federal government guaranteeing the business of failed mortgage giants Fannie Mae and Freddie Mac is $317 billion -- not the $130 billion normally claimed by the Obama administration. In a report delivered to the House Budget Committee on June 2, the CBO said a “fair value” accounting of guaranteeing the two defunct mortgage companies – known as Government Sponsored Enterprises (GSEs) – was more than twice as high as the Office of Management and Budget had accounted for. “Specifically, CBO treats the mortgages guaranteed each year by the two GSEs as new guarantee obligations of the federal government,” the CBO report said. “For those guarantees, CBO’s projections of budget outlays equal the estimated federal subsidies inherent in the commitments at the time they are made.” “In contrast, the Administration’s Office of Management and Budget continues to treat Fannie Mae and Freddie Mac as nongovernmental entities for budgetary purposes, and thus outside the budget,” the report stated. “It records as outlays the amount of the net cash payments provided by the Treasury to the GSEs.” The total of those cash payments is $130 billion, and is normally reported as the cost of the bailout of the GSEs to date. However, the CBO said that merely counting the cash payments, and not the cost of federal subsidies granted to the GSEs, obscures their real costs. Essentially, the CBO is accounting for the cost of the federal government guaranteeing the loans bought and securitized by the GSEs. Currently, Fannie and Freddie rely on explicit federal guarantees to continue to secure below-market financing rates. Because Fannie and Freddie are insolvent, the federal government must make up their losses when the loans they have guaranteed lose money in default. However, the CBO counts not only the amount of federal funds spent to keep the GSEs operating but the cost to the federal government to subsidize the mortgage guarantees issued by Fannie and Freddie. In other words, the CBO counts as a federal spending commitment the subsidy given by the government to the GSEs. The CBO calls this approach “fair-value” accounting because it treats the federal government’s actions just like the actions of any other market participant, taking into account the market risk of guaranteeing a mortgage. Typically, federal accounting does not do this because it is argued that because the government can print its own money, its risk is zero. The CBO says that even though the government can print money – technically by issuing Treasury bonds – this merely transfers the risk to the taxpayer, who will eventually have to pay off the bonds issued by the government. As of March 31, the CBO calculated that the GSEs held a fair-value deficit of $187 billion, meaning that on a fair-value basis Fannie and Freddie held a combined $187 billion more in liabilities than they did in assets. Added to the $130 billion in bailout payments the government has already made, the total cost of a bailout of Fannie and Freddie rises to $317 billion, which is far above the $130 billion usually cited by the OMB. “As of March 31, 2011, the GSEs reported a fair-value deficit of approximately $187 billion,” the CBO report stated. “Adding to that the $130 billion in net payments already received from the Treasury implies a fair-value cost to the government of about $317 billion in obligations incurred through March 2011.” That figure has grown since August 2009 when the CBO calculated that the cost of bailing out the GSEs was $291 billion, due mainly to further weakening in the housing market. Further, the CBO expects these costs to rise by an additional $42 billion between 2011 and 2021, an average of $4 billion per year. “CBO estimated that the subsidy costs of the GSEs’ new business would total about $42 billion over the 2012–2021 period, an average of about $4 billion a year,” the CBO said. However, this subsidy cost could grow if the housing market continues to be weak. While the CBO expects it to recover, the difference between the agency’s own 2009 and 2011 estimates show that this may not be the case.
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#1. To: CZ82 (#0)
So ob@m@ lied... what ELSE is new? Besides, the Fed gave all the money to pay it off, right? Of course, the money's backed by the gold the Fed Yeah.... uhhhhhh... RIGHT.
List of those unable to think: Bumper sticker on DwarF's car: you know, if we didn't invade Iraq we could have cleaned up Fanny and Freddy and still had six or seven hundred billion dollars left.
"Thats because your basically and idiot." And if we "NEVER" elected Democrats to office, then we wouldn't have had any problems with Fannie and Freddie to start with......
"I love the 45 caliber M1911, I respect the 9MM M9 Beretta but I only carry a CZ for my own personal protection". Quote courtesy of Lt Col John Dean Cooper, recognized as the Father of Modern Handgunning
Huh?
America...My Kind Of Place... "I truly am not that concerned about [bin Laden]..." "THE MILITIA IS COMING!!! THE MILITIA IS COMING!!!" Proxy IP's are amusing.....lmao
Don't you find it both hilarious, and pathetic, when comments about invading Iraq are made by the Leftwingnuts, who don't dare punish the overwhelming majority of DEMOCRATS that voted FOR THE INVASION? Including the POTUS tickets from 1992 through 2008? (Gore, Lieberman, Edwards, Kerry, Biden all vote AYE). The fantasyland you are required to live in to be a liberal in good standing is curious to say the least.
Proxy IP's are amusing.....lmao
You keep forgetting that from 2001-07 the GOP controlled the Presidency and both chambers of Congress.
"Thats because your basically and idiot." No I'm not.... You're forgetting who was in charge of Fannie and Freddie for the last 10 years...... they were basically all "Clintonistas"....... The companies and their executives were fined how much money (something like $400 million) for wrongdoing (2003-4) long before the crash in 2008..... And the companies spent something to the tune of $170 million on lobbyists (Bribes) to keep the "Good times" rolling......
"I love the 45 caliber M1911, I respect the 9MM M9 Beretta but I only carry a CZ for my own personal protection". Quote courtesy of Lt Col John Dean Cooper, recognized as the Father of Modern Handgunning
Including the POTUS tickets from 1992 through 2008? (Gore, Lieberman, Edwards, Kerry, Biden all vote AYE). The fantasyland you are required to live in to be a liberal in good standing is curious to say the least. They don't really have any morals/standards so what do you expect.......
"I love the 45 caliber M1911, I respect the 9MM M9 Beretta but I only carry a CZ for my own personal protection". Quote courtesy of Lt Col John Dean Cooper, recognized as the Father of Modern Handgunning
Daniel Mudd and Richard Syron were Clintonistas? Mudd's donation list includes George W. Bush, George Allen, and John McCain (http://www.newsmeat.com/ceo_political_donations/Daniel_Mudd.php). Richard Syron donated to George Allen, Mitt Romney, Kit Bond, Jim Bunning and the NRSC. Do you ever let facts enter in any of your arguments?
"Thats because your basically and idiot." And you don't?? You conveniently left out they donated to Democrats too.... So just because they donated to Republicans automatically makes them Pubbys too??? LOL.... Fannie and Freddie have been run by "MOSTLY" the Dumbassocrats for years, hence most of the problems happened because of them!!!!!
"I love the 45 caliber M1911, I respect the 9MM M9 Beretta but I only carry a CZ for my own personal protection". Quote courtesy of Lt Col John Dean Cooper, recognized as the Father of Modern Handgunning
The companies and their executives were fined how much money (something like $400 million) for wrongdoing (2003-4) long before the crash in 2008..... And the companies spent something to the tune of $170 million on lobbyists (Bribes) to keep the "Good times" rolling...... Goey doesn't like facts....
Proxy IP's are amusing.....lmao
The irony continues....Dumbass.
Proxy IP's are amusing.....lmao
Again, it' amusing that you argue that their CEO's were Democrats without any basis in fact. And you conveniently ignore the fact that the GOP controlled BOTH houses of Congress from 2001-2007 as well as oversight.
"Thats because your basically and idiot." overthehilloracles.wordpr...the-obama-fannie-freddie- connection/ littlesis.org/person/135 2/James_A_Johnson littlesis.org/person/10 73/Philip_A_Laskawy littlesis.org/person/233 26/Jamie_Gorelick en.wikipedia.org/wiki/Frankl in_Raines Happy now!!!! There are a couple more but I can't think of their names or affiliations.....
"I love the 45 caliber M1911, I respect the 9MM M9 Beretta but I only carry a CZ for my own personal protection". Quote courtesy of Lt Col John Dean Cooper, recognized as the Father of Modern Handgunning
America had the highest home ownership rates in the world before the Barney Frank and the rest of the power hungry politicians coerced the banks to loan money to people who can't afford it. What do we have now??? A huge mess that we will not recover from in our life times. Our kids will be forced into apartments, so the government can start bashing landlords at the federal level, just like they do in Manhattan. Maybe in 10 to 20 years we'll all be "fortunate" to live in rat infested, crime ridden government housing where we are all equally miserable.
Oh goody goody... we get to be just like Detroit!!!!! "NOT".......
"I love the 45 caliber M1911, I respect the 9MM M9 Beretta but I only carry a CZ for my own personal protection". Quote courtesy of Lt Col John Dean Cooper, recognized as the Father of Modern Handgunning
I didn't forget, I just think it's irrelevant......
"I love the 45 caliber M1911, I respect the 9MM M9 Beretta but I only carry a CZ for my own personal protection". Quote courtesy of Lt Col John Dean Cooper, recognized as the Father of Modern Handgunning
The Congressional Budget Office (CBO) says the real cost of the federal government guaranteeing the business of failed mortgage giants Fannie Mae and Freddie Mac is $317 billion -- not the $130 billion normally claimed by the Obama administration.
has, had, misplaced lost... 
mcgowanjm, ferret mike, skippy, fartboy/yukko, white sands, bucky, lucys idiot mom, e_type_jackoff, go56, badlie, wreck, calCON, mininggold, war, Banjo Boris, Biff, Godwinson and meguro. If you're on the above list, you're too fucking stupid to hold a real conversation.
#2. To: CZ82 (#0)
Badeye posted on 2011-04-29 10:30:22 ET
#3. To: go65 (#2)
you know, if we didn't invade Iraq we could have cleaned up Fanny and Freddy and still had six or seven hundred billion dollars left.
#4. To: CZ82 (#3)
And if we "NEVER" elected Democrats to office, then we wouldn't have had any problems with Fannie and Freddie to start with......
--GW Bush
--Sarah Palin's version of "The Midnight Ride of Paul revere"
#5. To: go65 (#2)
Thats because your basically and idiot."
#6. To: CZ82 (#3)
#7. To: CZ82 (#3)
And if we "NEVER" elected Democrats to office, then we wouldn't have had any problems with Fannie and Freddie to start with......
Badeye posted on 2011-04-29 10:30:22 ET
#8. To: go65 (#7)
You keep forgetting that from 2001-07 the GOP controlled the Presidency and both chambers of Congress.
#9. To: Badeye (#6)
Don't you find it both hilarious, and pathetic, when comments about invading Iraq are made by the Leftwingnuts, who don't dare punish the overwhelming majority of DEMOCRATS that voted FOR THE INVASION?
#10. To: CZ82 (#8)
No I'm not.... You're forgetting who was in charge of Fannie and Freddie for the last 10 years...... they were basically all "Clintonistas".......
Badeye posted on 2011-04-29 10:30:22 ET
#11. To: go65 (#10)
Do you ever let facts enter in any of your arguments?
#12. To: CZ82 (#8)
No I'm not.... You're forgetting who was in charge of Fannie and Freddie for the last 10 years...... they were basically all "Clintonistas".......
#13. To: go65 (#10)
Do you ever let facts enter in any of your arguments?
#14. To: CZ82 (#11)
Fannie and Freddie have been run by "MOSTLY" the Dumbassocrats for years, hence most of the problems happened because of them!!!!!
Badeye posted on 2011-04-29 10:30:22 ET
#15. To: go65 (#14)
Again, it' amusing that you argue that their CEO's were Democrats without any basis in fact.
#16. To: CZ82 (#0)
"Everything that can be invented has been invented."-- Charles Duell, Commissioner of US Patent Office, 1899
#17. To: jwpegler (#16)
Maybe in 10 to 20 years we'll all be "fortunate" to live in rat infested, crime ridden government housing where we are all equally miserable.
#18. To: go65 (#14)
And you conveniently ignore the fact that the GOP controlled BOTH houses of Congress from 2001-2007 as well as oversight.
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