The backdoor method to more bailout funds
More bailout without calling it ‘bailout.’ New legislation introduced by Senate Banking Committee chair Chris Dodd would allow the FDIC to borrow $500 billion. There is that word spelled with a ‘B’ again. That, and the ‘T’ word are getting a lot of use; so much so that most people have no idea what a big number either is. It’s well worth understanding the reality of these numbers if you pay taxes.
The FDIC could quietly use this money, without much fanfare, to cover the anticipated bank failures in the coming months. At the end of last year (2008), the FDIC insurance fund was down to $19 billion. There are $4.5 trillion in deposit accounts covered by the fund. Currently, the fund insures deposits in participating institutions up to $250,000. This level of coverage will remain through the end of 2009, and then revert to $100,000. Congress could always extend the higher limit.
This is all part of the bailout without focusing more attention on the TARP funds. As I state above, in the end, it is all taxpayer money. We work and sacrifice to provide the government with this money; we would hope that they use it judiciously.
Taxpayer funds for as far as the eye can see…….
In the past 50 days, we have seen $5 trillion in new government spending approved. The original bailout, which seemed like a gargantuan number, is beginning to look like a drop in the bucket.
Today, House Speaker Nancy Pelosi said that we need to “keep the door open” with regards to yet another stimulus bill. While we may be bailing EVERYONE out, we are the ones stuck with the bill for doing it. The spending continues unabated.
We are getting sidetracked with the additional waves of spending and need to determine what the original bailout has achieved. Today’s stock market was a record day. Two of the reasons for its performance are credited to remarks made by the Chairman of the Federal Reserve and some information from Citibank. According to the CEO of Citi, the bank realized a profit during the first two months of the year.
