Financially, the US is at the point where we’ve run off the cliff and are just beginning to realize it’s a loooooooooong way down:
The FDIC’s Deposit Insurance Fund, which had $10.4 billion at the end of June, has spent so much covering bank failures over the last three months that it is now completely out of money. This means there is no capital set aside to insure the $4.8 trillion of deposits and $320 billion worth of FDIC-guaranteed debt that US banks and other financial companies have issued. The real shocker that we discovered some time ago is that the FDIC ‘funds’ were never even held in a segregated bank account – the fees collected from the banks are accounted for as a part of the government’s general revenues that go towards military spending, bailouts, interest costs and other government programs. The FDIC ‘fund’ merely consisted of IOU’s from the general revenues accounts. And now that the Deposit Insurance Fund balance as of September 30, 2009 is negative the FDIC wants the institutions to prepay their assessments for all of 2010, 2011 and 2012. In effect, the FDIC wants to borrow money from the banks it provides insurance for.
Does this not strike you as surreal?
But wait! There’s more… the FDIC isn’t the only program whose revenue was sucked into the general fund, the easier to be used for other purposes. More and more, it’s become apparent the entire D.C. apparatus is one big bait-and-switch machine.