As S&L Bailout Costs Balloon, Concern Grows over Other Debts Liabilities Include Student Loan Guarantees, Bank Deposit Insurance

By Marshall Ingwerson, writer of The Christian Science Monitor | The Christian Science Monitor, June 7, 1990 | Go to article overview

As S&L Bailout Costs Balloon, Concern Grows over Other Debts Liabilities Include Student Loan Guarantees, Bank Deposit Insurance


Marshall Ingwerson, writer of The Christian Science Monitor, The Christian Science Monitor


THE water keeps growing muddier around the bailout of savings and loan depositors, the most expensive financial bailout in United States history.

Estimates of the ultimate bill have billowed out dramatically in recent weeks - to as high as half a trillion dollars, if market conditions are poor.

So far, market conditions have been poor. The cleanup, riddled with political tensions, is proving slower and more difficult than expected.

The growing bailout bill now has both officials and outsiders growing more uneasy about other liabilities hanging over the heads of American taxpayers.

"The problem is much broader than the S&Ls," says L. William Seidman, chairman of the Resolution Trust Corporation (RTC), the government body whose task is to clean up the industry. "It's government guarantees, which have become pervasive in our economy."

A recent report from the US General Accounting Office (GAO) pegs the federal government's total liability on loan guarantees and insurance at $6 trillion, or five times the total federal budget for this year.

No one sees any signs that most of these programs, which run from student loan guarantees to the insuring of bank deposits, will collapse as the thrift deposit insurance has.

But the federal fund that insures $1.8 trillion of bank deposits has dropped to the lowest levels of assets compared to the amount of money it insures since it was created just after the Great Depression.

Some Texas bank failures and low real estate values have run down the bank fund's assets to 70 cents for every $100 insured. This is about half the level of assets the fund should safely carry, says Mr. Seidman, who also chairs the Federal Deposit Insurance Corporation.

Most foresee the bank insurance fund building itself back up in the early 1990s, not collapsing.

But with real-estate markets weak nationally, fewer close observers are taking anything for granted.

"All of a sudden, everybody's very worried" about the whole range of government guarantees, says Peggy Miller, a lobbyist with Consumers Federation of America. Part of it is politics, she says, as officials like Seidman seek to spread attention away from their own troubled operations. But she adds that the concerns are quite legitimate.

Seidman, though, has not been shy about the problems of the bailout. His independent voice has not won him much favor with the Bush administration. The bailout was one of the first major initiatives of President Bush as president, and White House staff members are sensitive to its political fallout. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

As S&L Bailout Costs Balloon, Concern Grows over Other Debts Liabilities Include Student Loan Guarantees, Bank Deposit Insurance
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

    Already a member? Log in now.