And this is why our economy is colossally screwed right now.  The FDIC didn’t collect any premiums from banks from 1996-2006 and not they want permission borrow $500 million to fulfill its purpose. The reason they didn’t collect premiums?  Congress wouldn’t give them the authority to b/c…

Congress believed that the fund was so well-capitalized – and that bank failures were so infrequent – that there was no need to collect the premiums for a decade, according to banking officials and analysts.

Now is it me or is the way insurance generally work a pretty simple thing?  You pay a little bit of money each month when you can reasonably afford it, and then when something really bad happens your insurance company steps in and saves your bacon by helping to cover some to all of your expenses.

Because I like analogies, let’s look at the banks like a car.  What Congress basically said is, “hey, we have a Toyota Camry (reliable car that rarely has problems) so let’s stop paying our insurance cause we never use it.”  Too bad our reliable Camry just got totaled by a texting-while-driving teenager on the way home from the football game Friday night.

There’s a reason you’re required to carry auto insurance.  You never know when you’re going to get your car totaled or your going to total another driver’s car.  And its very rare that you’re the only one that’s going to be affected in an accident.  So now we’re stuck in the desert with jalopy quality banks that were Cadillacs several years ago trying to limp to the next gas station and we’re not sure they’re going to have enough gas to save our bacon.

Credit is the devil.