When the Federal Deposit Insurance Corporation was instituted back in 1933, the $100,000 deposit insurance was a huge sum to the average citizen. In today’s money, that’s worth about $1,600,000. Very few in 1930s had to worry about reached the insured cap. The per capita GDP was about $700 then. It is now about $45,000. So the insured cap has gone from about 140 mean incomes to about 2. It is now quite possible for a reasonable saver to accumulate more than $100,000.
In today’s economy, many people do not feel safe with uninsured deposits. Yes, you can split your nest egg among multiple banks. But that becomes harder as more and more banks go under or are bought out. It seems to me that it’s time for an increase in the insured cap. How high? I’d suggest at least $1M if they included an automatic inflation adjustment, but would be happy up to $10M if there was none.
Are there arguments against raising it?