4 ms·

That sounds like a large number, but given the amount of money flowing through the banking system it's basically a rounding error. This isn't even a tough call:

That sounds like a large number, but given the amount of money flowing through the banking system it's basically a rounding error. This isn't even a tough call: I'm thrilled to lose a six pack of beer's worth of interest payments rather than have my regional bank go out of business because everyone's freaked out about the safety of their deposits.

gjsman-1000 3y ago
> everyone's freaked out about the safety of their deposits Everybody knew that they were insured only until $250,000. At my bank, it's on a plaque at every self-service ATM at every branch. Every single person who deposited in these banks knew this and decided to live with that risk. The risk came due, and now the FDIC has decided that banks that are too big or influential get an unlimited protection, but small little mom-and-pop banks won't get a penny past $250K if they screw up. I think that if you actually put more than $250K in the bank and got hit, that's on you. You should've gotten insurance from elsewhere or used multiple banks. It literally exists and it's optional, it's called Depositors Insurance Fund Coverage (DIF), and it insures everything over $250K if you opt-in. You could also get MaxSafe, which insures up to $3.75 million. Wealthfront has a bank account with $5 million of insurance for those interested. Regular people should not pay a penny for bad risk-taking. To me, this reeks "Privatize the gains, socialize the losses."
- sharemywin 3y ago
  I thought it was socialism for the rich?
- junofan 3y ago
  The FDIC plaque says “at least $250k.” This is how the FDIC works. By the same logic you’re free to use accounts that aren’t FDIC-insured if you have a problem with how the FDIC works.
  - gjsman-1000 3y ago
    > By the same logic you’re free to use accounts that aren’t FDIC-insured Unless you are going foreign, FDIC insurance is legally mandatory. But be prepared for a hellish tax return the moment you open a foreign bank account - the IRS will demand a lot of paperwork. Edit for reply: There is NCUA for credit unions; but the limits are the same, still mandatory, and it's the US Government again. Basically off-brand FDIC.
    - RexM 3y ago
      Probably a distinction without a difference, but I have a non-FDIC insured account at a credit union. It's covered by NCUA instead, which probably works similarly as FDIC insured accounts.
    - junofan 3y ago
      The NCUA doesn’t insure too-big-to-fail banks to my knowledge. I feel that’s a reasonable alternative somebody would pick over an FDIC-insured bank were they concerned about insurance assessments. There’s also offshore, as you said.
justapassenger 3y ago
Is it a lot of money per person? No. But it’s plain lie that tax payers don’t pickup the bill. We do, every single dollar of it.
- junofan 3y ago
  I see the logic, but you can say that about anything. The bank pays for insurance on your deposits. If you want your own insurance or you don’t want insurance, you can certainly do that by not using FDIC-insured accounts.
  - justapassenger 3y ago
    That’s the whole problem. It’s not about FDIC insurance - I’m happily using it and accepting the cost. It’s about arbitrary decision to guarantee funds beyond explicit FDIC limits and blowing up the cost.
    - junofan 3y ago
      The systemic risk exception is no secret. There are plenty of other places to put your money. This cost is not borne by taxpayers.
      - apple4ever 3y ago
        This article is about the government forcing the banks to pay, who will force it on their customers, who are taxpayers.
  - johngladtj 3y ago
    No such thing as a non FDIC insured account. It's pretty much illegal to provide one
    - junofan 3y ago
      You can use a credit union or eurodollars.
kingTug 3y ago
National Alliance estimates it would cost $25B per year to eliminate homelessness in America. As always, it's the upper echelon that is the true welfare state.
- JumpCrisscross 3y ago
  > National Alliance estimates it would cost $25B per year to eliminate homelessness in America I’ve seen it as low as $8bn [1]. [1] https://www.bloomberg.com/news/newsletters/2022-12-21/citylab-daily-can-you-put-a-price-on-ending-homelessnes https://www.bloomberg.com/news/newsletters/2022-12-21/cityla...
  - Alupis 3y ago
    I am very skeptical of these low-ish figures, given current efforts are excessively expensive - such as LA spending $800k+ per individual. [1] https://ktla.com/news/los-angeles-is-spending-up-to-837000-to-house-a-single-homeless-person/ https://ktla.com/news/los-angeles-is-spending-up-to-837000-t...
    - mullingitover 3y ago
      The situation with LA's Proposition HHH was pure graft, imho. The voters were duped into thinking that their increase in sales tax was going to end the encampments, but there was fine print in the measure that enabled two devopers to rake in vast amounts of money while not remotely solving the problem. The language of the housing first measure stipulated that the developers of the housing had to have previous experience developing permanent supportive housing. There were only two developers that qualified, making them for all practical purposes no-bid contracts. LA could've sheltered every human being on the streets with that money, and still would've had hundreds of millions of dollars to purchase cheaper, existing housing. That whole thing was just wicked, brazen corruption that extended the needless suffering of everyone living on the street.
      - Alupis 3y ago
dxhdr 3y ago
Privatize profits, socialize losses. No wonder it works when you can justify it like that.
- lefstathiou 3y ago
  Socialize losses + Medicare, Medicaid, ERC, unemployment, education, subsidize food, housing, solar, recycling etc etc. System is working out nicely actually.
  - deleted 3y ago
    [deleted]
  - MichaelZuo 3y ago
    'Privatize profits, socialize losses beyond a certain threshold' wouldn't be as compelling of a slogan to rally behind. It's unfortunate that a sizable fraction of HN comments veer into sloganeering nowadays but I don't blame the parent, there are simply not that many interesting one-liners left to say that hasn't been said dozens of times already after 35 million comments.
  - dxhdr 3y ago
    > Socialize losses + Medicare, Medicaid, ERC, unemployment, education, subsidize food, housing, solar, recycling etc etc. I don't understand your point. Those other items are government services that I receive in exchange for paying taxes. Banking is a private for-profit enterprise, except when they mess up, then I pay for it. How are they the same?
    - chii 3y ago
      but you don't use medicare every day right? You only use it when there's a problem. Just the same, not everyone "uses" bank bailouts, but when they do, it prevents other problems in society. The only reason you'd be against it is because you think you will _never_ use a bank bailout, so in your mind, you're paying a tax for a benefit which you will never receive. But then why isn't this the same argument used for regular welfare?
apple4ever 3y ago
A. It is a large number and we should trivialize it B. Great - if you are happy to pay then you can and should. I, however, am not and should not be forced to pay for some rich peoples mistakes.

gjsman-1000 3y ago

> everyone's freaked out about the safety of their deposits Everybody knew that they were insured only until $250,000. At my bank, it's on a plaque at every self-service ATM at every branch. Every single person who deposited in these banks knew this and decided to live with that risk. The risk came due, and now the FDIC has decided that banks that are too big or influential get an unlimited protection, but small little mom-and-pop banks won't get a penny past $250K if they screw up. I think that if you actually put more than $250K in the bank and got hit, that's on you. You should've gotten insurance from elsewhere or used multiple banks. It literally exists and it's optional, it's called Depositors Insurance Fund Coverage (DIF), and it insures everything over $250K if you opt-in. You could also get MaxSafe, which insures up to $3.75 million. Wealthfront has a bank account with $5 million of insurance for those interested. Regular people should not pay a penny for bad risk-taking. To me, this reeks "Privatize the gains, socialize the losses."

sharemywin 3y ago
I thought it was socialism for the rich?
junofan 3y ago
The FDIC plaque says “at least $250k.” This is how the FDIC works. By the same logic you’re free to use accounts that aren’t FDIC-insured if you have a problem with how the FDIC works.
- gjsman-1000 3y ago
  > By the same logic you’re free to use accounts that aren’t FDIC-insured Unless you are going foreign, FDIC insurance is legally mandatory. But be prepared for a hellish tax return the moment you open a foreign bank account - the IRS will demand a lot of paperwork. Edit for reply: There is NCUA for credit unions; but the limits are the same, still mandatory, and it's the US Government again. Basically off-brand FDIC.
  - RexM 3y ago
    Probably a distinction without a difference, but I have a non-FDIC insured account at a credit union. It's covered by NCUA instead, which probably works similarly as FDIC insured accounts.
  - junofan 3y ago
    The NCUA doesn’t insure too-big-to-fail banks to my knowledge. I feel that’s a reasonable alternative somebody would pick over an FDIC-insured bank were they concerned about insurance assessments. There’s also offshore, as you said.

justapassenger 3y ago

Is it a lot of money per person? No. But it’s plain lie that tax payers don’t pickup the bill. We do, every single dollar of it.

junofan 3y ago
I see the logic, but you can say that about anything. The bank pays for insurance on your deposits. If you want your own insurance or you don’t want insurance, you can certainly do that by not using FDIC-insured accounts.
- justapassenger 3y ago
  That’s the whole problem. It’s not about FDIC insurance - I’m happily using it and accepting the cost. It’s about arbitrary decision to guarantee funds beyond explicit FDIC limits and blowing up the cost.
  - junofan 3y ago
    The systemic risk exception is no secret. There are plenty of other places to put your money. This cost is not borne by taxpayers.
    - apple4ever 3y ago
      This article is about the government forcing the banks to pay, who will force it on their customers, who are taxpayers.
- johngladtj 3y ago
  No such thing as a non FDIC insured account. It's pretty much illegal to provide one
  - junofan 3y ago
    You can use a credit union or eurodollars.

kingTug 3y ago

National Alliance estimates it would cost $25B per year to eliminate homelessness in America. As always, it's the upper echelon that is the true welfare state.

JumpCrisscross 3y ago
> National Alliance estimates it would cost $25B per year to eliminate homelessness in America I’ve seen it as low as $8bn [1]. [1] https://www.bloomberg.com/news/newsletters/2022-12-21/citylab-daily-can-you-put-a-price-on-ending-homelessnes https://www.bloomberg.com/news/newsletters/2022-12-21/cityla...
- Alupis 3y ago
  I am very skeptical of these low-ish figures, given current efforts are excessively expensive - such as LA spending $800k+ per individual. [1] https://ktla.com/news/los-angeles-is-spending-up-to-837000-to-house-a-single-homeless-person/ https://ktla.com/news/los-angeles-is-spending-up-to-837000-t...
  - mullingitover 3y ago
    The situation with LA's Proposition HHH was pure graft, imho. The voters were duped into thinking that their increase in sales tax was going to end the encampments, but there was fine print in the measure that enabled two devopers to rake in vast amounts of money while not remotely solving the problem. The language of the housing first measure stipulated that the developers of the housing had to have previous experience developing permanent supportive housing. There were only two developers that qualified, making them for all practical purposes no-bid contracts. LA could've sheltered every human being on the streets with that money, and still would've had hundreds of millions of dollars to purchase cheaper, existing housing. That whole thing was just wicked, brazen corruption that extended the needless suffering of everyone living on the street.
    - Alupis 3y ago

dxhdr 3y ago

Privatize profits, socialize losses. No wonder it works when you can justify it like that.

lefstathiou 3y ago
Socialize losses + Medicare, Medicaid, ERC, unemployment, education, subsidize food, housing, solar, recycling etc etc. System is working out nicely actually.
- deleted 3y ago
  [deleted]
- MichaelZuo 3y ago
  'Privatize profits, socialize losses beyond a certain threshold' wouldn't be as compelling of a slogan to rally behind. It's unfortunate that a sizable fraction of HN comments veer into sloganeering nowadays but I don't blame the parent, there are simply not that many interesting one-liners left to say that hasn't been said dozens of times already after 35 million comments.
- dxhdr 3y ago
  > Socialize losses + Medicare, Medicaid, ERC, unemployment, education, subsidize food, housing, solar, recycling etc etc. I don't understand your point. Those other items are government services that I receive in exchange for paying taxes. Banking is a private for-profit enterprise, except when they mess up, then I pay for it. How are they the same?
  - chii 3y ago
    but you don't use medicare every day right? You only use it when there's a problem. Just the same, not everyone "uses" bank bailouts, but when they do, it prevents other problems in society. The only reason you'd be against it is because you think you will _never_ use a bank bailout, so in your mind, you're paying a tax for a benefit which you will never receive. But then why isn't this the same argument used for regular welfare?

apple4ever 3y ago

A. It is a large number and we should trivialize it B. Great - if you are happy to pay then you can and should. I, however, am not and should not be forced to pay for some rich peoples mistakes.