Leaving SVB and Signature depositors uninsured will spook >$250k depositors at smaller banks. This will cause bank runs at smaller banks, as depositors will flee for the safer SIBs (JPM, BofA, Wells Fargo, Morgan Stanley), resulting in a cascade of increasingly expensive failures. Paying to stabilize these banks will reassure depositors at smaller and midsized banks, averting expensive run -> failure -> insurance claims + bailout cycles. Ultimately, with how the FDIC is structured, mass failures would cost the more responsible banks a tremendous amount of money. No one bank wants to buy SVB or Signature (as they are garbage), but each bank can handle an assessment for a fraction of the shortfall. It is a classic example of a collective action problem: individually the problem is nasty, but spread across all insured banks, the total cost is modest, and paying that modest cost will avert higher costs in the future.

>It's clear the ameriKKKan taxpayer will, once again, be cucked by the banking chads.

It's possible some further crisis will result in looting the public treasury, but for now it's just going to nibble on bank profits. No taxpayer funds are going into SVB depositor pockets. We'll see how effective it is tomorrow morning.