Thursday, September 24, 2009

FDIC in a pickle

I'm not sure I really understand all of this... the FDIC has spent a lot of money to pay off depositors in failed banks, and is now short of cash. Just 2-3 days ago, I read the FDIC is considering a huge loan from banks. This is where I get confused...

We know the government owns the FDIC, and we know the government has lent billions to bail out banks. So why would the government (FDIC) borrow money from (government) money in banks? Isn't that like borrowing your own money?

Now, I just read (Bloomberg) that if the FDIC 'borrows' from the government, it will push us past the debt limits. Does that mean the US government is 'tapped out'??

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