Experts Say Silicon Valley Bank Bailout Will Fall on All U.S. Bank Customers

( – Assessments continue as to the fallout from the second and third largest bank collapses in U.S. history with Silicon Valley Bank (SVB) and Signature Bank respectively. The Biden Administration has pledged tax-paying Americans will not foot the bill to guarantee the deposits but experts say otherwise. Monday saw a massive sell-off and the value of regional banks fall.

The plan is to use Federal Deposit Insurance Corp.’s Deposit Insurance (FDIC) to cover the deposits. Which raises the question, where do FDIC funds come from? The answer is quarterly payments from FDIC-insured banks. This means depositors from other banks will be paying the toll, not only that but FDIC has always capped insurance at $250,000, which in this instance is a small percentage of accounts. However, with this measure, Biden is nonetheless guaranteeing all funds.

William Luther, director of the American Institute for Economic Research’s Sound Money Project, assesses the nation’s bank customers will in the end “shoulder the burden.” He points out that FDIC is more of an emergency measure to be used sparingly. When it is used banks have to offset the costs which usually get passed along to the consumers, “in the form of higher fees and lower-quality services.”

MIT economist Simon Johnson further illuminated the depth of the situation; as this crisis in banking worsens and the FDIC is drained of funds, it is ultimately the tax-payer who will be responsible for re-filling it.

Nonetheless, Biden has lauded himself and his administration for taking “quick action” and that taxpayers will have “no losses borne.” Among his detractors is Republican presidential nominee Nikki Haley who said that Biden is “pretending” his measures are not a taxpayer bailout.

Representative Thomas Massie (R-KY), says Biden’s measures will likely increase recession and be fruitless as Americans “are not stupid” and know that should more banks fail, you can’t bail them all out. Representative Lauren Boebert (R-CO), called Biden’s plan “100% about protecting his donor base” as both banks were heavily used by the tech industry which donates 98% to democrats.

Copyright 2023,