I give up on America.

Discussion in 'The Political/Current Events Coffee House' started by TheRedHeadGamer, May 9, 2012.

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  1. DukeofAwesome Well-Known Member

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    Are you sure? Their website seems to support my claim, not yours. Maybe the FDIC does what you said too, but it definitely insures banks. For your clicking convenience: http://www.fdic.gov/about/learn/symbol/
    DukeofAwesome, May 15, 2012
    #201

  2. Skyicewolf City States Godmod Patrol

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    Why do people complain about the stimulus?

    I don't know why ANYONE would support Romney's plan for structured bankruptcy. If that happened, Millions of people would've lost there job. With the bailouts and stimulus, millions of people KEPT there job.
    Skyicewolf, May 15, 2012
    #202

  3. pedro3131 Running the Show While the Big Guy's Gone

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    Yes. My dad has spent 40od years in the banking industry, and starting 2 separate banks after being an executive vp of a large regional bank. The deposits are insured by the FDIC, so it tech insures the bank, but it's for piece of mind for the people. Notice they have it prominently displayed by the teller windows in every bank, that isn't by accident.

    The key point I wanted to make was about bank holdings. It is 100% wrong to say that banks don't hold part of your money on the premises. They're legally obligated to have a certain % of their deposits as liquid assets, and the FED will shut them down if they violate that.
    pedro3131, May 16, 2012
    #203
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  4. DukeofAwesome Well-Known Member

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    Oh ok, then I don't think I understood what you were saying the first time. I didn't know that banks were required to keep a percentage, but that still doesn't address the issue that the bank has no incentive not to lend out the other 90% of a depositors money since if there is a bank run, then they are insured against going bankrupt. The depositors will lose 90% of their money, and the bank gets to keep on lending out more money than it would if it weren't insured.
    DukeofAwesome, May 16, 2012
    #204

  5. pedro3131 Running the Show While the Big Guy's Gone

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    The only reason banks exist is because of their ability to reinvest people's money. Banks can't operate simply by charging you a yearly fee for holding your account. If banks weren't able to reinvest their holdings, they wouldn't be profitable and would cease to exist. The depositors don't loose any of their money, because the FDIC insures it. I forget what the limit is (I think it's around $250,000) but if you have under the limit the government gives you 100% of your money back. If it's more then that it's some percentage, but the vast majority of Americans don't have more then 250k in savings
    pedro3131, May 16, 2012
    #205
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  6. DukeofAwesome Well-Known Member

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    I agree, but due to the government insuring a bank's losses if they invest poorly, there is no incentive for a bank to not loan out money to nearly anyone who asks for it. If there is a bank run, then the government will step in and save the bank, even though the bank shouldn't be saved.
    DukeofAwesome, May 16, 2012
    #206

  7. slydessertfox Total War Branch Head

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    In short, we still need the fed.
    slydessertfox, May 16, 2012
    #207

  8. pedro3131 Running the Show While the Big Guy's Gone

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    The fed does yearly and quarterly audits of every accredited bank and will fine you or even shut you down if you give out frivolous loans. They also have regulations regarding the % of loans they give out the stipulations for granting loans.
    pedro3131, May 16, 2012
    #208

  9. DukeofAwesome Well-Known Member

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    It doesn't even have to be frivolous loans, it could just be a lot of small loans that weren't paid back. I wouldn't call a loan to start a business frivolous, unless the business itself was a stupid idea.
    DukeofAwesome, May 17, 2012
    #209
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