Does the FDIC Really Protect My Deposits?
Question: With as much debt as our government is in, does the FDIC really make my bank deposits safe? And if the FDIC had to pay millions of people $100,000 all at the same time, where would the money come from?
Paul Solman: Yes, your money is safe – or as safe as money itself. (And by the way, the FDIC now insures accounts up to $250,000 – per person.)
Where would the money come from? The same place the money is coming from now for all the traditional deficit spending, plus the bailouts and stimulus: The Treasury borrows money (by selling our Treasury bills, notes, and bonds) and the Fed creates money. We have an “explainer” on your question – “Where does Uncle Sam’s money come from?” – that’s now in production. Look for it on a TV near you (and here!) soon.