Comment by jobs_throwaway
14 hours ago
> the entire idea of being an "insurer of last resort" is based on an unlimited supply of money to fund losses that no longer make financial sense
Key insight here. Insurer of last resort == bag-holder for negative EV proposition.
Insurer of last resort == taxpayers bailing out people who can no longer afford to live in their multi-million dollar properties but refuse to sell and move.
TBF the best example of a program like this that currently exists is the National Flood Insurance Program which covers many sub-multi-million dollar homes and is billions of dollars in the hole.
It's a pretty astounding mix of "being the most expensive insurer that exists for a particular parcel" and "completely unable to fulfill its obligations in the event of any medium- or large-scale disaster." Hence my use of the term bailout.