[tensor]

This is more philosophy than anything. The FDIC, an instituted paid for by taxes, was introduced because farmers lost everything in previous bank failures. Insuring deposits but not shares is entirely a choice made by society, not any inherent property of cash, despite some people wanting it to be so.

In my opinion it's really rather arbitrary at a point. If an individual or corporation has a lot of money that they need to store, they need to consider risk and return regardless. Deposits have FDIC reducing risk, but don't earn much interest. There are government bonds which a different risk and earning profile, and stocks with a different risk profile again.

I feel it's rather narrow to focus only on deposits when in a practical sense it's pretty unlikely that anyone with any meaningful amount of money will keep it all in deposits. Similarly I also have sympathy for small share holders who lost money as part of their pension funds or otherwise. Not sure why hacker news commenters appear so gleeful about these people losing. It's not like bank failures are a "normal" occurrence in any sense.

[mulmen]

> The FDIC, an instituted paid for by taxes

FDIC is not funded by taxes.

https://www.fdic.gov/about/what-we-do/

“The FDIC receives no Congressional appropriations - it is funded by premiums that banks and savings associations pay for deposit insurance coverage.“

[JamesBarney]

There are very good reasons we insure deposits and not shares.

1. (Main reason) We insure deposits is to keep bank runs from happening. That's why it was done here.

2. Insuring stocks costs more money, and creates far more moral hazard.

3. Most people/companies have far more diversified stock portfolios than deposits.

[blululu]

Being a durable store of value is generally part of the definition of cash along with liquidity and fungibility. Governments put so much effort into making banking deposits function as cash because the modern banking system would break down if people thought they were better served by having a hidden shoebox full of cash. I don't think anyone here is gleeful about a pension fund losing its money but there is a meaningful difference in terms of which parties should receive federal assistance.