CBO, Which Missed the Housing and Stock Bubbles, Put the Cost of the Bailout at $25 Billion

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The Congressional Budget Office (CBO) estimated the cost of the government's bailout of Fannie Mae and Freddie Mac at $25 billion. It is worth noting that CBO completely missed the both the stock market crash and the housing crash. The failure to miss the stock market crash led it to over-estimate capital gains tax revenue by close to $600 billion over the decade from 2001-2011. It would be appropriate to present CBO's track record when discussing CBO's projections of the cost of the bailout.

--Dean Baker

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