Remember when the FDIC meant a secured bank? (companies, dollars, money)

[pghquest]

More government conflict of interest while putting your tax dollars at risk..

Treasury, GMAC in talks for 3rd round of US aid - wtop.com (http://www.wtop.com/?nid=111&sid=1796502 - broken link)

According to the paper, the FDIC told GMAC Tuesday that it would guarantee the remaining $2.9 billion in debt in order to prevent the company from being forced to reduce its lending volume at a time when the U.S. government has a sizable interest in making sure customers can afford to buy vehicles from government-backed automakers General Motors and Chrysler.

If they arent profitable, why would they NOT be expected to reduce its lending volume?

GMAC in August posted a wider second-quarter loss of $3.9 billion, mainly due to booking a $1.6 billion charge related to the company's ResCap mortgage business. GMAC also incurred a $1.2 billion tax charge on its conversion from a partnership, or LLC, to a privately held corporation.

The FDIC has taken over and closed banks in better condition than this, but I guess since this finance company is now owned by the government, we should prop it up while at the same time putting the FDIC at risk...

What happens if/when the FDIC one day cant pay all of these debts?

[summers73]

FDIC was a bad idea, because people just dumped their money in whatever bank regardless of their solvency and only noting what the CD rate was.

[pghquest]

Follow up: The reason this is very important, FDIC is running in the red, FDIC fund in the red until 2012 - Oct. 14, 2009

And rather than be worried about the balance sheet of the FDIC, the government just continues to print money, move money from A to B, guarantee bad companies while ignoring deficits..

This is NOT a Democrat/Republican issue, its a government issue.