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>punishing people for not having accounted for black swan events in their risk assessment is also not scalable

For a country that seems hellbent on abandoning individuals of lesser means to the vagaries of fate, to frequently swoop in to save those already of better standing when misfortune strikes seems pretty hypocritical.

Sickness is still the most frequent cause of bankruptcy in our country. What social programs we have prickle with difficulties in gaining or maintaining access, seemingly designed to make life harder for those already forced through misfortune to require them.

Half our political establishment regularly suggests the destruction of even these, intending to leave individuals with nowhere to turn at all.

>Why isn't it. Pragmatically it's pretty silly to insure the first 250k and then expect people to go through the trouble of spreading their cash over a multitude of accounts

How is it silly? From the perspective of the FDIC, if you have two seperate accounts (at 2 seperate banks) that represents a drop in risk. It's unlikely 2 banks with fail and now FDIC only has to replenish 250K instead of 500k.

I'm not following your logic here. If there's 10 people each with a $2.5m deposit at a separate bank each and they all spread their accounts to $250k in each of the 10 banks, the FDIC still has a risk of $2.5m per bank right?

How likely is it that all 10 banks fail at once?

Well, my example is for 1 of 10 banks failing but probably somewhat likely without regulations if people panic and start bank runs.

Think about this with some numbers: if there are 100 banks, and every business puts 1% of their cash into each bank, the overall risk is the same as if 1% of businesses put 100% of their cash into a random bank out of the 100.

The cost to FDIC if an individual bank fails is the same in both the above scenarios, even though in the first businesses put a lot more effort into spreading out their funds. It looks less like it could have less risk to the FDIC, but really isn’t making any difference.

The odds that 100% of businesses each decide to pull their money out of the same bank at the same time is less than 1% of businesses who invested at the same bank pulling out their money. Especially if they are in the same industry and know the same people urging a sudden withdrawal. Maybe even mostly located in the same geographic region.

But if the FDIC insures all deposits anyway, then there would never be a bank run to begin with because nobody would panic that they wouldn't get their money out, so spreading risk among multiple banks is a "solution" to an artificial problem.

It's a solution to a bank run because of fear of the banks going under. It's not a solution to a bank run because an industry needs cash quickly. For instance, Silvergate had a lot of crypto firms as clients, and in late 2022/early 2023 all those clients needed cash. You can imagine something similar happening in other industries.

I don't see a problem with a rule or regulation that limits individual daily withdrawal limits. That would solve that specific issue as well, and anybody who needs to withdraw more than that per day clearly has enough funds to have accountants that can coordinate across multiple banks.

10 people can go a few days without access to 10% of their money much easier than 1 person can go a few days without access to 100% of their money. And hopefully more customers means more scrutiny for each bank.

> Punishing people for not having accounted for black swan events in their risk assessment is also not scalable. Do we want people to do useful stuff, or to spend their time digging the rule book to ensure they've accounted for every eventuality?

So you want government to provide complete health insurance, after all. we want people to spend their time doing usefull stuff not studying the very complex intersection of all known diseases and medical beurocracy?

I do, in fact.

>So you want government to provide complete health insurance, after all. we want people to spend their time doing usefull stuff not studying the very complex intersection of all known diseases and medical beurocracy?

Yes, obviously. That we have the bulk of our population in precarious wage slavery under threat of medical bankruptcy at best, and a slow painful agonizing death of preventable causes at worse, is a crime against humanity given this is the richest country in human history.

But would the government run solution sacrifice personal freedom? After all, when you socialize costs, you get free rider problems.

Will I have to pay more if I'm obese? Can I get cut off the system for not taking a vaccine?

I'm hesitant to make the government a partner in my personal choices regarding diet, recreational fun like hang gliding, lifestyle choices, etc.

> So you want government to provide complete health insurance, after all.

Yes. This would be the single biggest boon to small business the US had ever enacted.

Yes, exactly.

If you have more than 250k in the bank you should be smart enough to split it into multiple accounts or hire someone to do treasury management.

I've never run a large company but I feel like it wouldn't be feasible when you have transactions routinely over 250k, like how I'd imagine most of these companies would be with their payroll.

I think the solution to that is placing predence on the bank selection mechanism. You could audit banks' lending positions and make risk adjusted based decisions.

Lots of people have way more than that due to retirement accounts (which sometimes need more liquidity or people want to get out of the market so they have more cash on hand). Or even if you have a down payment on a house in most of the coastal states. 250k in the bank is not much money these days.

I just don’t understand this attitude. It’s 250k. We’re not talking about all that much money. Why do you think people with 250k should have extra knowledge or access to special advisers?

I think you're out of touch with how much money Americans have in savings

Vs say, 1k in savings or 10k in savings, somebody with >250k in savings certainly can pay some form of fiduciary

Well, it's not just individuals with their savings. It's businesses, too.