MONEY: Why not deal directly with the Treasury?

October 06, 2008
A Question
Posted by Charles Featherstone at October 6, 2008 01:59 PM

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Some years ago, I signed up for U.S. Treasury press releases regarding bond and note sales. I don’t remember why I did this, and generally I never bothered to read the e-mails.

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Once upon a time, Treasury debt, specifically T-Bills, were only available in 10k$ denomination. Once upon a time, FDIC insurance was only available up to a very limited amount. (I remember it as 10k. But that was a long long time ago.) Obviously, there was some payoffs — legal campaign contributions or illegal graft — and “insurance” was raised to 100k.

Why do we need FDIC?

Small depositors can deal directly with the Treasury via Treasury Direct!

So, explain to me again WHY we need any FDIC insurance?

Is it a payoff to banks who make contributions? Or is there another scam going on?


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