Pros And Cons Of Federal Deposit Insurance
Federal Deposit Insurance Corporation
To restore confidence in banks and encourage savings, Congress created the FDIC through the 1933 Banking Act to insure bank customers against the loss of up to $5,000 their deposits if their bank should fail. Today, customers are insured up to $250,000 if their banks fail, ensuring their safety with the banking system.
Criticism
Opponents asserted that deposit insurance would never work. They pointed out that deposit insurance would remove penalties for bad management. Critics also charged that deposit insurance would be too expensive and that it would represent an unwarranted intrusion by the federal government into the private sector.
Federal Housing Administration
The FHA was created as part of the …show more content…
After a foreclosure, the government pays the lender up to 100 percent of the amount owed by the borrower.
Tennessee Valley Authority
The TVA was a federal agency created in 1933 for the economic development of the Tennessee River watershed. The TVA built twenty dams to control flooding, generated hydroelectric power, increased agricultural production, and revitalized the Tennessee Valley, a region greatly affected by the Great Depression. The TVA also provided jobs, low-cost housing, reforestation and other services. It continues to carry out serving the people and land of the Tennessee Valley till this day.
Criticism
The strongest opposition to TVA came from power companies, whom resented the cheaper energy available through TVA and saw it as a threat to private development. They charged that the federal government's involvement in the power business was …show more content…
The legislation was also profoundly disappointing to reformers, who demanded "cradle to grave" protection as the birthright of every American. The new system authorized pitifully small payments; its retirement system left huge groups of workers uncovered, such as migrant workers, civil servants, domestic servants, merchant seamen, and day laborers; its budget came from a regressive tax scheme that placed a disproportionate tax burden on the poor; and it failed to provide health insurance.
Securities and Exchange Commission
The SEC was created in 1934 to serve as a federal "watchdog" administrative agency to protect public and private investors from stock market fraud, deception and insider manipulation on Wall Street. The SEC is still in existence and provides clarity into the workings of U.S. companies, so investors can get accurate information about the profitability of the companies in which they would like to invest.
Criticism
Following the SEC’s inability to control Wall Street fraud, the U.S. Securities and Exchange Commission received sharp criticism from the public for its seemingly weak enforcement of Wall Street’s too big to fail banks. Many believe that the agency is unethically protecting Wall Street fraud due to the incident in 2010 when the National Archives had contacted the SEC expressing concern that an unauthorized destruction of federal records had
To restore confidence in banks and encourage savings, Congress created the FDIC through the 1933 Banking Act to insure bank customers against the loss of up to $5,000 their deposits if their bank should fail. Today, customers are insured up to $250,000 if their banks fail, ensuring their safety with the banking system.
Criticism
Opponents asserted that deposit insurance would never work. They pointed out that deposit insurance would remove penalties for bad management. Critics also charged that deposit insurance would be too expensive and that it would represent an unwarranted intrusion by the federal government into the private sector.
Federal Housing Administration
The FHA was created as part of the …show more content…
After a foreclosure, the government pays the lender up to 100 percent of the amount owed by the borrower.
Tennessee Valley Authority
The TVA was a federal agency created in 1933 for the economic development of the Tennessee River watershed. The TVA built twenty dams to control flooding, generated hydroelectric power, increased agricultural production, and revitalized the Tennessee Valley, a region greatly affected by the Great Depression. The TVA also provided jobs, low-cost housing, reforestation and other services. It continues to carry out serving the people and land of the Tennessee Valley till this day.
Criticism
The strongest opposition to TVA came from power companies, whom resented the cheaper energy available through TVA and saw it as a threat to private development. They charged that the federal government's involvement in the power business was …show more content…
The legislation was also profoundly disappointing to reformers, who demanded "cradle to grave" protection as the birthright of every American. The new system authorized pitifully small payments; its retirement system left huge groups of workers uncovered, such as migrant workers, civil servants, domestic servants, merchant seamen, and day laborers; its budget came from a regressive tax scheme that placed a disproportionate tax burden on the poor; and it failed to provide health insurance.
Securities and Exchange Commission
The SEC was created in 1934 to serve as a federal "watchdog" administrative agency to protect public and private investors from stock market fraud, deception and insider manipulation on Wall Street. The SEC is still in existence and provides clarity into the workings of U.S. companies, so investors can get accurate information about the profitability of the companies in which they would like to invest.
Criticism
Following the SEC’s inability to control Wall Street fraud, the U.S. Securities and Exchange Commission received sharp criticism from the public for its seemingly weak enforcement of Wall Street’s too big to fail banks. Many believe that the agency is unethically protecting Wall Street fraud due to the incident in 2010 when the National Archives had contacted the SEC expressing concern that an unauthorized destruction of federal records had