This is the Cato Daily Podcast for Thursday, April 3rd, 2014.

I'm Caleb Brown.

Some groups are trying to fight to stave off the end of Fannie Mae and Freddie Mac,

the mortgage giants, that played a substantial role in the financial crisis.

Mark Calabria, director of the Cato Institute's Financial Regulation Studies, argues that shutting down the agencies should be a top priority to prevent another housing bubble and crash.

So to remind ourselves, Fannie and Freddie are two large government-sponsored enterprises that

buy mortgages from lenders, so they don't make loans themselves.

They purchase them from others.

They played a very big role in the financial crisis.

They certainly were not the only cause,

but they were one of many.

And they were the largest bailouts in the financial crisis. The

taxpayers putting in a little bit over 180 billion which again is larger than the

bank bailouts larger than AIG or larger than the autos.

Much of that money has been quote unquote repaid

in terms of collected on the profitability

and dividends paid by Fannie and Freddie.

They still receive a number of other subsidies that are a little

less explicit. But their general consensus is in Washington that Fannie and Freddie should go.

I think that consensus is absolutely right in that regard.

Of course, much of the Washington consensus is really just a desire to change the name and not

change a very broad system of subsidies for the housing market.

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