This is the Cato Daily Podcast for Wednesday, October 27, 2010.

I'm Caleb Brown.

Surprise, surprise.

New reports show that Freddie and Fanny's role in the housing meltdown

will cost taxpayers more and more and probably more than

that.

Mark Calabria, director of the Cato Institute's Financial Regulation Studies, says one idea

that's never really been considered instead of making taxpayers bear the costs,

why not make creditors foot the bill?

Didn't we know that this was a distinct possibility that whatever we were on the hook for, taxpayers were on the hook for with regard to Fannie

and Freddie could increase dramatically over the years as a lot of these securities peter out.

There was certainly an expectation of that.

For instance, over a year ago, the Congressional Budget Office came out with estimates that they

thought would be closer to say 400 billion.

And what we've seen in recent days is the regulator for Freddie and Fannie coming out with an update

of likely losses based largely on what they think the housing market might do.

So if the housing market actually gets better, you know, I mean, it's important to keep in mind.

We're going to lose more money under all scenarios. So even if the housing market turns around

as great, you know, we're likely to see another 70 billion say put in. If the housing

market deteriorates more, of course we'll see more and we might see as much as

another two or

three hundred billion put it. So essentially what the regulator has done is

...