Deposit insurance is what enables the banking system to create money and generate inflation. It is what prevents the population from removing their cash from the system. The banks wouldn't be able to dilute the purchasing power of the currency without deposit insurance.
Deposit insurance is the reason why banks are able to cause inflation.
The problem with deposit insurance is that it results in inflation...
Why not let banks fail? Why force people to bail them out? Deposit insurance is malign.
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