The Government should make it clear to people that the banks can increase the money supply

The Government wants to protect depositors from their decisions. As a result of this, the money supply will increase as bank deposits increase. Although the protective impulse is perhaps laudable the result is that the banks are able to inflate the money supply. In Communism it is illegal to be unemployed and as a result everyone starves to death, a similar result follows from deposit insurance. A bigger problem results from the deposit insurance than was presented by the risk of a bank failing. It is not the fault of ordinary taxpayers if some banks have loaned repeatedly and have insufficient reserves. To impose deposit insurance is not a defensive use of force and so it is not the concern of Government, or anyone. There is no reason to impose deposit insurance on innocent associates, we are not responsible for the actions of banks we are not involved with. Neither banks, nor their customers should be protected from the consequences of their actions by force. The Government should not pretend to provide deposit insurance if it does not intend to save the banks, equally if it does intend to save the banks, by monetising the deposits, as there is no other way, then it should be clear to everyone that the banks can inflate the currency.