I want to make one additional point. If the Biden Administration really, truly wants to underwrite the uninsured deposits of Silicon Valley Bank, there should be a special tax levy (call it a fee) placed on banks for doing so. Anything else is horrifically regressive. Allow me to explain.
If any governmental entity or the Federal Reserve, a public-private hybrid, underwrites SVB’s depositors by issuing credit (“printing money”), it will increase inflation. That will fall most heavily on the poorest people. We’ll be taxing the poor to pay the rich. Robin Hood in reverse.
And that doesn’t even get into the insanity of underwriting the uninsured deposits of foreign companies. I honestly have no idea why we’re doing that.