“Continued inaction in the face of the gathering storm in our financial markets would be catastrophic for our economy and our families,” says Obama, proposing an expansion of “federal deposit insurance for families and small businesses across America who have invested their money in our banks” in an effort to solidify support on Bailout, Take 2.
That is why today, I am proposing that we also raise the FDIC limit to $250,000 as part of the economic rescue package – a step that would boost small businesses, make our banking system more secure, and help restore public confidence in our financial system.
I will be talking to leaders and members of Congress later today to offer this idea and urge them to act without delay to pass a rescue plan,” said Barack Obama.
Rescue plan. Not bailout. Got it?
Obama’s entire statement is after the cut.
Yesterday, within the course of a few hours, the failure to pass the economic rescue plan in Washington led to the single largest decline of the stock market in two decades.
While I, like others, am outraged that the reign of irresponsibility on Wall Street and in Washington has created the current crisis, I also know that continued inaction in the face of the gathering storm in our financial markets would be catastrophic for our economy and our families.
At this moment, when the jobs, retirement savings, and economic security of all Americans hang in the balance, it is imperative that all of us – Democrats and Republicans alike – come together to meet this crisis.
The bill rejected yesterday was a marked improvement over the original blank check proposed by the Bush Administration. It included restraints on CEO pay, protections for homeowners, strict oversight as to how the money is spent, and an assurance that taxpayers will recover their money once the economy recovers. Given the progress we have made, I believe we are unlikely to succeed if we start from scratch or reopen negotiations about the core elements of the agreement. But in order to pass this plan, we must do more.
One step we could take to potentially broaden support for the legislation and shore up our economy would be to expand federal deposit insurance for families and small businesses across America who have invested their money in our banks.
The majority of American families should rest assured that the deposits they have in our banks are safe. Thanks to measures put in place during the Great Depression, deposits of up to $100,000 are guaranteed by the federal government.
While that guarantee is more than adequate for most families, it is insufficient for many small businesses that maintain bank accounts to meet their payroll, buy their supplies, and invest in expanding and creating jobs. The current insurance limit of $100,000 was set 28 years ago and has not been adjusted for inflation.
That is why today, I am proposing that we also raise the FDIC limit to $250,000 as part of the economic rescue package – a step that would boost small businesses, make our banking system more secure, and help restore public confidence in our financial system.
I will be talking to leaders and members of Congress later today to offer this idea and urge them to act without delay to pass a rescue plan,” said Barack Obama.
Raising the FDIC protection from 100K to 250K? Who is that going to benefit?
I don’t know about you, but I sure as heck don’t have 100K in my bank account.
A lot of people have more than that in their retirement accounts, but they’re not insured anyway.
You an I might not have more than 100k in savings. But many, many smallish businesses do. It’s not just for individuals.
It will also help prevent runs on banks, when customers get scared for no reason about losing their money (as happened in a small way with WAMU last week), and so the alarmist prophecies become self-fulfilling. That was one of the biggest factors that turned recession into the Great Depression.
It’s the first suggestion I’ve seen that actually makes a lot of sense.
Of course, another huge factor that caused the Great Depression was the dustbowl when crops failed. Now would be a good time to desperately hope the worse-case scenario for climate change is proved wrong…
This just came into my mailbox (I’m on the email list for both sides):
“The FDIC should quickly be granted the authority to increase the deposit insurance cap from $100,000 to $250,000 so that families do not have to worry about their money. We cannot allow a crisis in our financial system to become a crisis in confidence.
I call on everyone in Washington to come together in a bipartisan way to address this crisis. I know that many of the solutions to this problem may be unpopular, but the dire consequences of inaction will be far more damaging to the economic security of American families and the fault will be all ours.
-John McCain”
Although I do agree that it is time for higher limits on FDIC insurance, making a big deal out of this is ridiculous. This is just politics. Is it really that hard to open up another bank account once you’ve reached the $100k limit?
Representative Carolyn Maloney, a New York Democrat, said small businesses in her district would support higher limits on deposit insurance. “Many of them are opening up numerous accounts for FDIC insurance,” Maloney said. “It is difficult to conduct business that way.”
If you find it difficult to conduct business using numerous bank accounts, maybe you’re not cut out to conduct business. Plus, this would only make conducting such “difficult” business 2.5 times less difficult.
This doesn’t solve anything except for letting stupid, rich people be 2.5 times as stupid while still insuring they keep their money.
Why don’t we just give 1 million dollars to every citizen in the country? That is a lot less than a 700+ million dollar bailout. Just hinge it on a proviso that is must be used towards a mortgage in some respect (in the instance that 1 million may not cover your mortgage per se). Seems a lot cheaper and more geared towards regular human beings, not corporations/businesses that have been effected/affected. And I’m not trying to leave out the hard-working immigrant; we can help them out too if need be.
700 billion bailout / 300 million citizens = $2,333 for every citizen in the country. Which won’t cover more than one or two mortgage payments.
If you cut out the kids and only pay out to the roughly 3/4 of citizens over the age of 18, it’s still only $3,111.
My calculator doesn’t have enough space to show me how much it’d cost to give us each a million bucks.
Mr. X was being Mr. X. It would be $300,000,000,000,000. I’d still rather have 1 million dollars, though.