Remember that scene at the beginning of It’s a Wonderful Life, where people are all desperately trying to get into the bank because if it fails before they get in, they lose their money? That’s what the FDIC prevents.
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We still have bank failures now, Silicon Valley bank? Why eliminate it?
If you haven’t noticed elon wants to grift crypto via the government so by eliminating oversight and forcing people to run the bank, guess what kinds of assets people will dump their digital dollars into?
I’m guessing because 1) dumb ideological reasons involving cutting every government service that isn’t the military or immigration enforcement and 2) FDIC is primarily funded by fees from the banks. Consumers are so detached from how stuff works for the most part that removing the FDIC insurance fee wouldn’t give consumers higher interest rates, but just decrease the banks expenses and make them more money.