The $787 billion stimulus in 2009 provided a big jolt of liquidity to the economy, but The Wall Street Journal's Nick Timiraos, citing a report from the Brooking's Instituion, says that 150 federal credit programs also had a large impact.
Those programs sharply expanded during the recession and yielded stimulus in 2010 of $344 billion, according to Deborah Lucas, an economist at the Massachusetts Institute of Technology. That’s similar to the economic impact of the stimulus bill in the same year. The calculation measures borrowing that likely wouldn’t have taken place if borrowers had to seek private lending sources, many of which pulled back in the aftermath of the crisis.
Altogether, the government guaranteed some $584 billion in mortgages through federal agencies in 2010, and $1 trillion through Fannie Mae and Freddie Mac.
While Brookings reveals the scope of the project, Timiraos reports that its hard to know how much they actually cost.
Right now, federal agencies use one form of accounting that estimates the lifetime cost of a new loan by discounting all of the government’s future cash flows to a present value at the time the loan is made. Using that method, these programs actually make money for the government, at least on paper. A fair-value accounting method, meanwhile, measures the costs of federal guarantees at market prices. The Congressional Budget Office prepares cost estimates using both methods.