The Federal Deposit Insurance Corporation (FDIC) the government organization which insures bank accounts for individual Americans money is in trouble they are running low on money to back deposits. Last year the FDIC had $45 billion dollars to back deposits now they have around $10 billion. This is because eighty plus backs had to be taken over by the FDIC this year because of insolvency issues. Before the banking crisis is over America could see another 100 to 150 banks be taken over by the FDIC. It is clear that the FDIC has to get its hands on a significant amount of money to pay for their bank takeovers or they wont be able to do their job. The only options the FDIC has per the FDIC to solve this need for cash problem is to either assess fees on their member banks or tap the $100 billion credit line the FDIC has with the U.S. Treasury. In the past year, the FDIC assessed a special fee on banks and received $5.6 billion from such an assessment, there was a big public hullaballoo over this assessment so it sure seems like the realistic scale of future assessments wouldnt be sufficient to solve the FDICs money problem; the FDIC faces losses of more than $21 billion with the 80 plus banks so far taken over this year. The FDIC borrowing big sums of money from the Treasury isnt an ideal solution because one it triggers public anger over government bailouts and it lowers the reputation of Americas banking industry from a world wide reputation standpoint. The FDIC has available to it another option which if they act like a group smart of people they will take advantage of. The FDIC made over $9 billion over the past twelve months guaranteeing borrowing by U.S. banks. The program was started in the past twelve months when the credit markets froze and banks had huge problems borrowing money especially at reasonable rates. This program is scheduled to end at the end of October of this year. The reasons for ending the program are understandable banks can now borrow at reasonable rates, some participating banks made huge and rather unseemly (considering their strong financial reports) profits off the program and concern about putting the FDIC on the hook for a huge amount of bank debt if respective banks default on the respective debt. The reasons for ending the program dont trump the reasons for continuing this bank debt insurance program. The single compelling reason for continuing this program is the FDIC can really use the fees from this program, the likely billions of dollars the FDIC would get in fees per year are extremely valuable to the mission of the FDIC at the current time, why throw this resource away now it doesnt make any sense. Moreover, the FDIC could use this program to increase the capital reserves in banks which is a loudly publicly proclaimed goal of government officials for the U.S. banking industry. Plus, for those banks which are really hurting from commercial loan and other loan defaults, this program could be medicine for them to become financially strong again. Of course the FDIC should bar Goldman Sachs and the other big profitable banks from participating in the program, the unseemly profits they make considering their overall profits call for this conclusion. Also, the FDIC could get agreements from participating banks that they wouldnt use the profits from their participation in this program to increase their dividends rather they would use it to strengthen the balance sheet of the bank. Lastly, having this FDIC program which is a tool to inject capital into banks facilitates banks being able to better lend to American families and businesses which helps the economy. Keeping this FDIC program seems like a multiple win situation, lets hope the governmental officials dont steal defeat from the jaws of victory here.