The FDIC is backed by the full faith and credit of the US government. If a bank fails, your insured deposits will be made while, usually the next business day.
The US government has a debt limit. The government is going to run out of options for not exceeding that limit in a few months unless it is raised. There are people in congress suggesting that they should let the limit get hit. If the debt limit is hit, do you e pectin the government to be able to pay out FDIC money in a timely manner?
Not just FDIC though, in 2008 and again today the Fed is making clear that their backstop is bigger than just FDIC. it can’t be any bigger than the debt limit so I find it sobering to have this discussion while we’re heading towards that cliff.
