That's incorrect. The FDIC is funded by banks, and receives no appropriations from Congress [1].

Further, this article, and hence the whole thread, does not distinguish between banking and investments (like Glass Stegall did). Depositors are never affected by a bank going under (up to FDIC limits). Rather, securities holders are affected. Huge difference.

Even in 2008, banks did not get bailed out by taxpayers, they got bailed out by the Federal Reserve, which again, is not funded by taxpayers. [2]

[1] https://www.fdic.gov/about/learn/symbol/ [2] https://www.richmondfed.org/faqs/frs

You are being disingenuous. In terms of social cost there is little practical difference between taking value through taxation and taking it through currency inflation. The Fed, FDIC, FNMA, FHLMC, and pretty much every other acronym that starts with F is backed by the full faith and credit of the US government. No, not officially, but the market has absolutely no doubt that this is fact.

Although we do (mostly) agree, I don't think it's disengenuous. Here's why - other businesses/industries have been bailed out, including the following. Reasonable failures are tolerated, but systemic ones are not - regardless of the industry:

- Steel Mills (in 1952)

- Railroads (most notably Penn Central in 1970)

- Car companies (all three in the last 40 years)

- Manufacturers (various)

- Utilities (mostly nuclear plants/companies)

- Airlines (post 9/11)

My impression is that most people believe the government will step in before any industry is ruined (assuming a quick decline, not necessarily a slow one over many years).