[dragonwriter]

> Do you think the US government could cover every single cent if all the depositors wanted their money out now?

Yes, because the US government can literally fiat dollars into existence.

OTOH, the big point of guaranteeing deposits is that a credible party doing that prevents bank runs, which are caused by fear of bank collapse that will destroy access to deposit balances.

> The FDIC only has enough to cover a tiny proportion of bank liabilities.

The FDIC’s funds are just the zero-effort first-love of payment; FDIC insurance is guarantees by the government, not just the gives held by the FDIC.

> It seems very disingenuous for people in this thread to say "well if everyone cashed out tethers" and then handwave away the alternative of "well if everyone cashed out USD".

Tether isn't backed by an entity which can simply will USD into existence; FDIC or NCUSIF insured bank or credit union balances are.