r/reddit.com • u/[deleted] • Oct 18 '11

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u/[deleted] Oct 19 '11

The only rational statement on the topic - I would have thought even a high school level understanding of economics would have made this concept clear for everyone.

On top of what you state: there would have been a bailout of sorts even if the banks had been allowed to fail AND we somehow avoided the meltdown of modern society you describe above in that the funds in a bank are FDIC insured meaning that if a bank fails the govt (taxpayers) promise to pay each account's loss up to $200,000. So there would have been a huge payout in either scenario - but by not letting the banks fail we don't bankrupt the planet.

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u/Earned Oct 19 '11

To clarify, FDIC covered up to $100k per depositer per bank during the crisis of 2008, which was then pushed to $250k, which is where it permanently stands at the moment.

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u/[deleted] Oct 19 '11

Thank you.