FDIC limits

[Libsmasher]

Both Obama and McCain have asserted that FDIC limits should be raised to $250,000. This is more of the government meddling which has caused problems in the past, including the current credit illiquidity crisis. It was precisely the similar FSLIC insurance that created the S & L crisis in the 1980s. S & L's were making risky real estate loans, with correspondingly high returns, to keep up with what depositors demanded in the context of the Jimmy Carter hyper-inflation. NOBODY with an IQ over 80 would have deposited money in such institutions w/o the FSLIC guarantee. In effect, the FSLIC was underwriting the S&L's risky gambling. This is the same sort of thing that produced the current crisis, with the same results only of course quantitatively much worse. The government forced banks to loan to unqualified borrowers with the Community Reinvestment Act, and investment banks went along, since Fannie Mae as well supported these loans with it's facilitation of a secondary market and an implied government guarantee.

And now the lib media and obama and other assorted idiots are getting away with saying it was lack of regulation that caused both the 1980s S&L problem and the current problems, when in fact it was exactly the opposite - government meddling, and now they want to bring on more of the same bad policy.

 

[foggedinn]

If memory serves, the 100k FDIC limit on insured deposits goes back at least to the 60's. That it hasn't been raised substantially before now is puzzeling to me.

I consider the sub-prime problem, too much regulation, too little regulation, etc. to all be red herrings. Everyone seems to be deliberately ignoring the 800 lb. gorilla in the room.

For several years now we have been fighting a multi-trillion dollar war with a credit card, off budget, with no provision being made to pay it off, or even any plans for any provision to pay it off.

As long as we ignor the 800 lb. gorilla, we can pretend that it isn't there. Fat lot of good that will do us when the gorilla notices us.

 

[Libsmasher]

If memory serves, the 100k FDIC limit on insured deposits goes back at least to the 60's. That it hasn't been raised substantially before now is puzzeling to me.

I consider the sub-prime problem, too much regulation, too little regulation, etc. to all be red herrings. Everyone seems to be deliberately ignoring the 800 lb. gorilla in the room.

For several years now we have been fighting a multi-trillion dollar war with a credit card, off budget, with no provision being made to pay it off, or even any plans for any provision to pay it off.

As long as we ignor the 800 lb. gorilla, we can pretend that it isn't there. Fat lot of good that will do us when the gorilla notices us.

The war and it's costs have absolutely NOTHING to do with the collapse of investment banks - in fact the government's steady war materiel purchases propping up investments in defense industries probably helped keep them afloat.