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View Diary: Social Security by the Numbers (73 comments)

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  •  I really liked this diary. (2+ / 0-)

     I wish someone would do one like this on FDIC, which from all I can gather IS bankrupt and has been since 2008.    

    •  Tell More (2+ / 0-)
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      radical simplicity, This old man

      I'm writing a book on events in the Republican presidential 2012 primaries. I've been researching Fannie and Freddie and so on. Should I look at FDIC, too? What do you think is the basic problem there?

      •  Everyone should be alarmed about how much (2+ / 0-)
        Recommended by:
        Liberal Thinking, JerryNA

        financial institutions have transferred the risk of their operations to the tax payer.  I believe some elements of Fanny and Freddie fall into this category.  
        This is what little I know about FDIC.  FDIC was part of the Glass-Steagall Act passed in 1933.  FDIC is funded by assessments on the member banks.  
        FDIC was the part of Glass-Steagall that DID NOT GET REPEALED in 1999.  
        When the fall out of bank failures from the Great Depression slowed to a trickle in the early 40’s, that is one or two a year, the fund built up a surplus.  It made sense to cut the amount of assessment the banks were required to pay into the fund, so that’s what Congress did.  Then they repealed Glass-Steagall in 1999 and banks started to fail. (AGAIN!)  – a trickle in 2001 and  hundreds in 2007.   The FDIC fund of course went bust during this period, exactly when I don’t know, and the tax payer began to pick up the cost.  At the moment I’m not sure how many billions the fund (member banks) owe the tax payer but it’s in the double digits, in the 80's I think.  Was the assessment substantially increased when banks started to fail again?  Who knows.?  How much are we (tax payers) on the hook for at this moment in time

        •  Thanks (2+ / 0-)
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          This old man, samddobermann

          I think part of your answer is in Dodd-Frank. And, of course, the Republicans want to repeal that (and SOX, if you can imagine).

          I believe as part of that they made the guarantee of up to $250,000 per institution permanent. Dodd-Frank has helped to stabilize the financial system, but the Republicans are still fighting it. The filibuster over appointing someone to head up the Consumer Protection Agency is just a part of it, as is their insistence that it not get funded.

          The funny thing is that D-F and SOX primarily protect the investor. What is the main constituency of the Republican Party if it isn't investors?

          Apparently, it's Wall Street.

          I'll look more closely at FDIC in my research. Thanks!

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