Could the government possibly do anything to make banking easier or more profitable? The extent of the insanity is demonstrated well by this Bloomberg piece. Because of government-guaranteed debt, Warren Buffet’s baby, Berkshire Hathaway, is paying significantly more than Citigroup to borrow cash these days.

The difference in borrowing costs illustrates how government aid is giving an advantage to companies that needed multiple helpings of U.S. rescue funds. Each of the companies except for Berkshire were able to find buyers for notes paying 2.375 percent or less because of their government backing, while Berkshire will pay 4 percent to bondholders who bought $750 million of the firm’s AAA-rated debt last week.

Never underestimate the lengths that our elected officials will go to to bail out these banks. And betting against them is very risky, so be cautious out there.