You're right on the money, Rick! (pun intended)
This is the point raised by SportsNut... the Fractional Reserve System is the problem. Banks loan out more than they hold in reserve (demand deposits). They were able to get away with it until the call came in to cover those obligations. They have always expected FDIC to cover their untenable (loan to deposit ratios of 32:1 or more!) monetary policy.
Insurance companies, on the other hand, are required to hold the amount liable in secure funds (close to 1:1 ratio). Even if they go BK, their customers are covered because of the state guaranty association, and they are audited regularly.
Now, if we just had regulation of banks like we do in insurance, we wouldn't be in the jam we are. Chris Cox was asked to include regulation of Credit Default Swaps (CDS) over a year ago (or longer), but he refused. Had he done his job, it is possible none of the dominoes would have fallen as they did. He is the one Republican most responsible for the election loss than any other... with the economy in full decline, the Dems got the upper hand. McCain was correct in that Cox should have been fired right then and there.... as it is, he will be replaced with the new Administration, but alas, too late to do any good politically.
Boy you can say that again!. Nationally and locally it seems that there is a pattern with this type of thing with the Dems. Our Governor here in WA was just re elected and had massive budget short falls/overspending on transportation projects that are years behind and massively over budget. Then they just passed a HUGE project equivalent to the "Big Dig" in Boston with no mention as to how to pay for it. I guess she may go for a state income tax on top of our sales tax.
Tax and Spend. Don't worry, we are here to take care of you.....scary.
This is the point raised by SportsNut... the Fractional Reserve System is the problem. Banks loan out more than they hold in reserve (demand deposits). They were able to get away with it until the call came in to cover those obligations. They have always expected FDIC to cover their untenable (loan to deposit ratios of 32:1 or more!) monetary policy.
Insurance companies, on the other hand, are required to hold the amount liable in secure funds (close to 1:1 ratio). Even if they go BK, their customers are covered because of the state guaranty association, and they are audited regularly.
Now, if we just had regulation of banks like we do in insurance, we wouldn't be in the jam we are. Chris Cox was asked to include regulation of Credit Default Swaps (CDS) over a year ago (or longer), but he refused. Had he done his job, it is possible none of the dominoes would have fallen as they did. He is the one Republican most responsible for the election loss than any other... with the economy in full decline, the Dems got the upper hand. McCain was correct in that Cox should have been fired right then and there.... as it is, he will be replaced with the new Administration, but alas, too late to do any good politically.
Now the challenge is how to dig out of this humongous hole. We can't spend our way out, but you can't tell a Democrat that!
Boy you can say that again!. Nationally and locally it seems that there is a pattern with this type of thing with the Dems. Our Governor here in WA was just re elected and had massive budget short falls/overspending on transportation projects that are years behind and massively over budget. Then they just passed a HUGE project equivalent to the "Big Dig" in Boston with no mention as to how to pay for it. I guess she may go for a state income tax on top of our sales tax.
Tax and Spend. Don't worry, we are here to take care of you.....scary.
