Saturday, July 26, 2008
Yves Smith (YS) has a 23 July post at Naked Capitalism worth reading and a link to a 23 July 2008 NYT article about the Congressional Budget Office's (CBO) estimate of Treasury Secretary Henry Paulson's proposed Freddie-Fannie rescue plan. Here's a link: www.nakedcapitalism.com/2008/07/omb-comes-close-to-saying-it-made-up.html.
I am less critical of the CBO's estimate than YS. Why? When did you last buy a car? If you recollect, the salesman was reluctant to quote you a "cash price" and merely said something like, "It will be $550 a month", not even saying for how many months. I suspect this practice has taken root at the CBO, i.e., the rescue plan will cost $25 billion; $25 billion a month for 24, 36, 48 or 60 months. Take your pick.