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Comment by mullingitover | Hacker News Reader

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.

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

Socialize losses + Medicare, Medicaid, ERC, unemployment, education, subsidize food, housing, solar, recycling etc etc.

System is working out nicely actually.

'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.

> 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?

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?

That's a curious description of insurance.

> 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."

I thought it was socialism for the rich?

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.

> 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.

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.

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.

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.

> 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/cityla...

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-t...

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.

Having experienced many similar stories, including the infamous High-Speed Rail in California, I see no reason we can assume this type of thing can do any better under existing systems.

That’s obviously a wrong or insufficient because much more has spent than that without fixing the problem.

The United States already spends over 1 trillion every year on social assistance, including 71 billion yearly on housing assistance. Anyone claiming that it would be merely a money problem to end homelessness is lying to you.

Bc the strategy is all wrong. They need to give them homes to live in for free, no strings attached. There's ~600k homeless people in america. If the budget is $25B per year, that's 43k/person. No means tests just free apartments.

> They need to give them homes to live in for free, no strings attached.

Possibly. But you need to address the fact that a lot of these folks need expensive medical assistance. That isn't just housing.

Somewhere around 15% of SF homeless have a traumatic brain injury. That's about 1 in 8 homeless who desperately need expensive medical assistance.

Single payer/medicare for all would have a larger impact on the homeless than mere housing or cash.

Can I get one of the free houses also? Happy to stop paying $4600 a month in rent.

You run into the issue - once you start giving out free homes, you will suddenly have a lot more homeless people. It's called induced demand (people who were borderline homeless will prefer to go homeless to get a home rather than keep fighting to stay off the street).

People who quote a number like $8B forget that proposed solutions to the problem can actually change the scope of the problem.

I'm sure that while the number of homeless might be 600K, the number of close-to-homeless is likely at least 10X that number.

And? What's so bad if we extend free housing to everyone who is killing themselves working to just barely make rent and also may eat ramen? Not just those actually sleeping in the gutter.

such a gov't program would discourage jobs that pay very little, but still needs doing. It's a harsh thing to say, but society has a need for such roles, and it is the threat of homelessness that "forces" people into taking such roles. I'm not saying it's right, but it is reality.

Those roles don't have to pay very little - that's a choice we make as a society. We can always subsidize the pay by taxing wealthy business owners, programmers, doctors and lawyers a bit more (and real estate speculators, etc).

It is actually a pretty bad thing for society how much people are paid to optimize ads and dark patterns for example - something that is absolutely of zero net benefit to society as a whole. I think there should be a tax on anyone working in ad-space.

I'm not saying whether or not we should do it. I'm saying that the estimates given (8B) don't take into account behavioral changes based on the program. If we expand the scope (as you said), we're looking at ~80B instead of 8B.

But that's just one example - there are many other possible behavioral changes that can happen that will alter the cost computed up front even more (i.e. we're not even considering fraud with people applying for free housing and how much $ it will take to catch the fraud and deal with it).

I think we should advocate for solutions, as long as we keep in mind the true potential costs.

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.

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.

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.

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.

The systemic risk exception is no secret. There are plenty of other places to put your money. This cost is not borne by taxpayers.

This article is about the government forcing the banks to pay, who will force it on their customers, who are taxpayers.

No such thing as a non FDIC insured account. It's pretty much illegal to provide one

You can use a credit union or eurodollars.

It's not the taxpayers that are picking up the bill, it's the banks, and probably the customers. It ends up to pretty much the same crowd, but it depends how the banks will make up those fees on their balance sheets. They could just choose to reduce dividends if they wanted to.

I’m not 10 years old to think banks will cut profit. Nor they should.

The point is that they won't assign the losses equally across all members. This might have no effect on large banks since they're getting more members from fleeing regional bank members, and smaller regional banks to be less competitive.

Maybe larger banks will cut marketing spend, and just keep fees low, or hike up fees on low net worth members to cut keep the top X%.

They will most likely want to make this loss transparent to the users they want to keep, and banks have a lot of levers they can pull.

Disclaimer: I work as a SWE at a neobank.

> It's not the taxpayers

> probably the customers

Practically every person in the US has a bank account, so...

I think you'd be surprised how many people in the US are unbanked -- around 6M households (so if we go by the average household size, 15M people) in 2021. Granted, this number has been dropping over time, for better or worse.

Also consider that most banks in the US are not being hit with this $16B bill. If you bank at one of the thousands of other banks, you won't be affected by this. And if you do bank at one of these banks, and they choose to increase fees or lower interest rates, you're free to vote with your wallet and move your deposits elsewhere.

And those customers are tax payers, being forced to pay something by the government.

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