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Ear to the Ground

Early Estimates of Bailout Range to $100 Billion

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Posted on Jul 22, 2008

The independent Congressional Budget Office has announced the expected federal taxpayer bailout of Fannie Mae and Freddie Mac will appear as a $25 billion budget expense, but that the real bill could be anywhere from zero to $100 billion. This, even though the once-governmental agencies were formally privatized in 1968.


New York Times:

The budget office said there was a better than even chance that the rescue package would not be needed before the end of 2009 and would not cost taxpayers any money. But the office also estimated a 5 percent chance that the mortgage companies, Fannie Mae and Freddie Mac, could lose $100 billion, which would cost taxpayers far more than $25 billion.

The House is expected to act this week on housing legislation that includes the proposed rescue plan. Legislative language has not been finalized, but the Congressional Budget Office said its estimates were based on the plan by the Treasury Department and that it did not expect significant changes in the final bill.

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By Charles Hillestad, July 23, 2008 at 9:18 am Link to this comment
(Unregistered commenter)

Or, a Few Relevant Questions to Ask about Yet Another National Financial Fiasco
(published last week in the Daily Oregonian)

      Shouldn’t some portion of the massive bailout taxpayers are handing the incompetent company officials who recklessly got us in this mortgage mess be used instead to hire more regulators to insure we don’t keeping throwing Treasury money away like this every few years?  Shouldn’t a few of those who cost us maybe trillions be fired or jailed or at least demoted for their incompetency and greed which has jeopardized our entire economy.  At what point should greed start amounting to being a traitor or a threat to national security?  Why have they allowed our future to be mortgaged to the hilt to foreign countries who don’t like us?  Why are we blowing all our resources and capital today on short term gains without saving anything for the future? 

    Why is it that none of those in charge can seem to think beyond the next fiscal quarter or the next election cycle?  Shouldn’t we finally stop listening to some of the mindless Pollyannas in the media who kept saying nothing was wrong, was wrong, was wrong?  Why have we forgotten so soon the 1980s disaster these same nincompoops got us into with the now defunct savings and loan industry?  Doesn’t it strike anyone as interesting how often someone named Bush seems to be playing a prominent role in these debacles?  Why did the Republicans when in control dismantle all the useful regulations and inspections of the industry?  What made any sane person think controls weren’t needed or that the ones profiting wouldn’t help themselves given the chance?  Where did such arrogance come from?

  The Democratic Party has nothing to be proud of for their rolling over whenever Republicans sneer on the subject, but is there anyone left who still believes that the Republican party deserves a reputation for knowing anything about financial security or conservatism other than how to line their own pockets at the expense of everyone else?  Why doesn’t this seem to make a difference to the voters?  What is it about our education system that seems to prevent them from analyzing this for themselves?

      It would be nice if we got a few trustworthy answers on these questions, although the corporate media we need to look into the questions seems as hell bent as lemmings to follow the corporate financial leaders right off the cliff.

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By srelf, July 23, 2008 at 8:50 am Link to this comment

Dare I wonder whether all readers are ACTING upon the info we receive on Truthdig? For instance, what are we doing about the “socialism for the rich” described above? What can we do? Only what our political ancestors have done before us… organized resistance. It’s every generation’s responsibility. Add your weight to that of others! One way or the other.

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By purplewolf, July 22, 2008 at 11:24 pm Link to this comment

We are spending about 4 billion dollars a week just in Iraq, not counting everything they never tell us about. Perhaps Bush should take a 6 week vacation from the Iraq war and take that money saved(about 24 billion $$) from that war and put it into the problems here at home, because after all we don’t dare raise the taxes on the rich, or make some of these top CEO’s of these companies who make millions of dollars a year pay for their mistakes. Nope! Can’t have that.

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By dicl, July 22, 2008 at 2:01 pm Link to this comment
(Unregistered commenter)

As usual, the masses will subsidize the power elites’ profits.

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By BlueEagle, July 22, 2008 at 1:47 pm Link to this comment

And where will this $25 Billion or more come from?

The government can’t borrow any more from foreigners and raising taxes is out of the question. We are left with only one option: the printing of more Federal Reserve Notes, money creation out of thin air, debasement of the FRN, aka the inflation tax. Get ready for Zimbabwe style hyperinflation. The best news here is that soon everyone will be a millionaire.

The pundits say that the American taxpayer will pay for it. This is only part of the story. Anyone in the world holding Federal Reserve Notes or anything denominated in FRNs will help pay for it.

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