Word: bailouts
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First it was $100 billion, then $200 billion, $500 billion, and now it's $1 trillion or more. As estimates of the cost mounted for the bailout of the savings and loan industry, a taxpayer's only consolation was that at least commercial banks were safe and sound. Or were they? The way things are going, the Federal Deposit Insurance Corporation, which insures commercial bank deposits, may have to be renamed the Future Disaster Inevitable Corporation. In grim testimony before the House Banking Committee last week, Comptroller General Charles Bowsher warned, "Not since it was born in the Great Depression...
...major bank or the onset of a recession could wipe out the FDIC's insurance fund, which has only $12 billion or so on hand to cover the $2 trillion in insured deposits in commercial banks. And if the fund was exhausted, the government might have to provide a bailout with taxpayer money. Just a day after Bowsher's testimony, the Congressional Budget Office predicted that even without a recession, some 630 banks will fail over the next three years and drain the FDIC of more than $20 billion, far more than the insurance fund is likely to have...
BUSINESS: A taxpayer bailout for banks...
...less threatening enemy has been all but forgotten. That foe is the soaring federal deficit. In the four months since President Bush and congressional leaders convened their budget summit, Administration estimates of this year's deficit have exploded from $100 billion to $149 billion, not counting the $100 billion bailout of bankrupt savings and loans. The gap could grow even larger if the economy, already on the brink, is pushed into a recession by surging oil prices from the Persian Gulf crisis...
...will inevitably begin to arise. Questions about the costs and objectives of the buildup will be asked when Congress returns from its August break. The possibility of heavy casualties, the plight of the hostages, the economy, the federal deficit (now well over $200 billion, including the savings-and-loan bailout) and the belief by some experts that the U.S. may have to maintain a military force in the gulf more or less permanently -- all these considerations are certain to come into play as the stalemate with Saddam continues...