The new FDIC ceiling is just a new tax.

[BuyingThyme]

The increase in FDIC limits is simply a new tax on the general fund which directly benefits people who have more than $100,000 in cash to throw around.

I know that most people around here understand that, but I find it curious that the tax increase is being described in terms that do everything but identify a new tax on the general fund which will be used to benefit people with more than a hundred grand in the bank.

And, of course, those same beneficiaries, the ones with the cash, are are generally the ones who will benefit from the other tax provisions which will predictably find their ways into the final bill.

[napi21]

1. But it's at least partically offset by higher rates paid into the FDIC

Ins. fund by all banks.

[BuyingThyme]

6. Yeah, but what insurance company is going to sell you insurance when

there's a hurricane on the horizon?

[high density]

7. Huh?

The FDIC is supported by its member banks. If it needs more funds in the short term to stay afloat then that seems like a decent investment to make. What we DON'T need are more runs on the banks like what brought down WAMU.

[BuyingThyme]

10. Whether or not there are runs on banks, the taxpayers will

be paying more on FDIC-insured accounts as banks continue to fail. And the banks will be paying on the margin, subsidized by the timing of the ceiling-limit increase.

It's never a good deal to sell insurance when there's an accident in progress.

[high density]

18. The FDIC closes banks long before they are completely bust

When a bank fails they do have assets that can be sold to recover funds. People need to stop thinking of bank failures as 100% losses.

[galileoreloaded]

11. So instead, we will increase bank insurance costs, that get passed down as fees..

to the people that can least afford it. I'm loaded, so fine by me, my accounts are fee free based on the amounts I deposit and hold. Keep funding my risk mitigation, suckers.

[napi21]

8. Not a good analagy. The Fed IS the insurer in this case, however they

at least APPEAR to be operating like the insurance industry does, and assuming that although they collect premiums from all the banks, only a few will have to "file claims" so to speak. I think this increase, which I happen t othink should have been raised a long time ago, coupled with some of the other measures I've heard about today certainly will improve the current situation. Certainly some rules need to be changed and ALL the rules must be enforced.

[BuyingThyme]

12. I agree that it's a good idea as far as keeping deposits stable, but

in the end it's likely going to be a tax burden.

Had the ceiling been changed long ago, like you said, then the premiums could have been adjusted accordingly. But in this atmosphere, a break-even premium is probably more than any bank is willing to pay (except the ones playing the books).

[The_Casual_Observer]

2. This thing has aways been unnecessary anyway. If you had more than

100,000 to deposit, you would open other accounts in other banks & so on. It's a distraction.

[theoldman]

5. Ditto, see my post.

[napi21]

13. DON'T assume that all people do as you think they should!

I was just talking to my cousin last night. She mentioned her MIL who was recently widowed, and there's a family tiff, so there's only one person the MIL is speaking to and it's NOT my cousin & her husband. She mentioned that the lady had enough $$ to live comfortably since she's already 85yo. Then she went on to say that the lady had $199,000 in one CHECKING ACCOUNT!!!!! and $225,000 in a CHECKING ACCOUNT!!! at another bank. I emphasize ch. acct. because I honestly didn't realize any individual would ever keep THAT much $$ in a checking account when their lifestyle didn't require large daily or monthly expenditures! I cautioned my cousin to contact the person who still speaks with the MIL and move that $100,000+ out of those accounts and into at least another two banks!

If you watched your TV just after that Calif. bank croaked, they interviewed quite a few people, standing in line outside that bank, close to tears, and some crying, because they didn't realize that only their 1st $100,000 was insured!

[theoldman]

3. Just what percentage of the American people have more than

$100,000 in the bank? If you have $300,000 you can spread it around in different banks. There is something fishy about the increase to $250,000.

[napi21]

14. Check my post #13. n/t

[W_HAMILTON]

4. It reminds me of Hillary on CNN.

No, not THAT Hillary. I don't know her last name, but she is a frequent guest on Larry King Live, giving the Democratic point of view.

It's not the situation you mention, but in the same vein, where you can look at something differently. She mentioned how a tax credit, or tax break, or tax loophole, is basically a giveaway anyway. Just like now, this bailout bill will probably pass; before it wouldn't pass because of the amount of taxpayer money given away, but it will probably get passed now, because it includes tax reductions.

Do people not realize they are basically one in the same? When you aren't taxing appropriately, you are basically giving them a taxpayer bailout anyway.

I'm probably not making sense, because I'm having one of my headaches so I'm in my "foggy" mood, and can't express myself clearly. Hillary on CNN made a much better point, and I am surprised I don't hear more people making that same point.

[leftofthedial]

9. but if we help those rich people

maybe they won't kick us when they walk by our good sleeping spot in the doorway of the abandoned building on main street.

[chicagoexpat]

15. U kiddies & the RW maggots had ur say a coupla days ago, it's time for the grown ups to apply the

medicine.

For those of us who know how to make hard choices in a bad situation.

No small business or small town needs a bank account of over $100,000, do they, they all operate out of a mattress like u do

[Marrah_G]

16. Being a grown-up and all...do you think you could manage to actually type out 3 letter words?

Or is that just to difficult?

[chicagoexpat]

17. Naw