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Comment by ttar | Hacker News Reader

Start the Bank of the United States, cancel FDIC insurance.

There problem solve.

We tried that. Our country has had great difficulty with central banking in the past, and today. Entire books have been written on this topic, if you wish to learn more, I'd start with the history of the First and Second bank of the United States.

https://en.wikipedia.org/wiki/First_Bank_of_the_United_State... https://en.wikipedia.org/wiki/Second_Bank_of_the_United_Stat...

The East Asian economic miracle is all about the state in control of the banks (printing).

Read Quest for Prosperity -- the private/public construct of distinction is a complete myth that is exposed by the titans in Asia and Latin America. The more we stick to the myth in the US, the longer it will take for us to have the same degree of success. Innovation comes not out of motive for profit, but ou of need and desire and capability.

I agree that a sovereign nation shouldn't be borrowing from anybody in order to trade with other nations, but isn't the Asian economic miracle also driven by slave labor?

> The East Asian economic miracle is all about the state in control of the banks (printing).

So was the Asian Financial Crisis. And to a lesser extent Japan's "lost decades".

There are no simple answers in economics. Everything comes with ugly drawbacks.

FDIC is a form of privatizing the profit, while socializing the risks for the banks.

The FDIC is funded by banks. The FDIC did not have to use taxpayer dollars during the financial crisis. In practice, the FDIC has not been involved in these socialized risks you speak of, though if it ran out of money, the government would back it up.

The FDIC also provides public benefits, like avoiding economy-crippling bank runs.

It's a good thing.

The FDIC is bailed out by the taxpayer, so does the private banks. It's a nothing but socializing the risks, while privatizing the profits. It's immoral.

China does things right here, when it fails due to your corruption, you get executed, instead of bailed out.

The FDIC has never been bailed out, and as I pointed out, there are plenty of public benefits to that government guarantee. We would be less wealthy as a society without it.

Yes

BUT it's also a form of "insurance". If there's a suspect a bank won't be able to honor deposits, bank run ensues, THEN the given bank can't honor deposits obviously, because no bank works like that today, that is: self fulfilling prophecy

It's a necessary evil (for the customer's sake)

If you don't trust the bank, don't put your money there. Otherwise, put your money at the Bank of the United States, backed by and owned by the full faith of the US taxpayer.

I will not bail out private money making banks via the FDIC via my tax dollar.

If you put money into a private bank, then when it fails, you should lose that money.

I will not bail out private money making banks via the FDIC via my tax dollar.

Never in American history has the FDIC had to take a "tax dollar" during a bank failure. The government does back it, yes--but the amount of private money in the FDIC makes it extremely unlikely that bank failures even at the scope we were looking at in 2008 will tap them out.

Credit unions don't participate in FDIC insurance, they have arranged their own private insurance. So it is not a necessary evil.

Credit unions participate in the NCUA, which is decidedly not private.

http://www.ncua.gov/Pages/default.aspx

Sorry, you are right, I didn't realize it was a federal agency, I thought it was something they had arranged amongst themselves.

Insurance is a necessary evil, if it's backed by the government or by a pool of banks is a different issue

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