Washington Free Beacon By Washington Free Beacon Editors
Silicon Valley Bank (SVB) is getting a bailout. That’s the latest news from the United States Treasury Department, which announced it will make depositors in the failed bank whole.
Many of those depositors were tech start-ups, and until Treasury Secretary Janet Yellen’s announcement on Sunday afternoon, they didn’t know if they would make payroll on the 15th of the month. Their investors, famous for their risk-taking, feared massive losses in their portfolios.
The bank’s clients were in a bind because federal insurance only covers deposits up to $250,000. That’s more money than almost anybody would keep in a bank account—but not a start-up! According to the Economist, almost 93 percent of SVB’s deposits were not insured.
These entrepreneurs either knew, or should have known, the risks they were taking, and the government should not be in the business of rewarding this arrogance and stupidity. A government bailout is nothing more than a backdoor that will leave taxpayers on the hook for the foolish decisions of so-called capitalists who are unwilling to pay the costs of risks gone awry.
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