This is a neat history of deposit insurance in the US (via Economist’s View). It is a clear indication that many of these debates have occurred in the past, and many of the ideas that float around nowadays are simply old ideas being given fresh life.
In 1829, Forman proposed an insurance fund capitalized by mandatory contributions from the state’s banks. Debate in the State Assembly was heated. Critics said failures could overwhelm the fund; they also argued that its very existence would reduce the “public scrutiny and watchfulness” that restrained bankers from reckless lending. This remains the intellectual argument against insurance today. But Forman’s plan was enacted, and subsequently five other states adopted plans.
All did not go smoothly. In the 1840s, during a national depression, 11 banks in New York State failed and the insurance fund — as prophesied — was threatened with insolvency. The state sold bonds to bail it out.
There has been a bit of discussion of these issues here. The key thing is that we are working off a clear and concise trade-off, and description of reality, that has existed for a long time now. Even with this knowledge and this clear framework, trying to figure out what is “right” is difficult, and often policy merely goes to where it is “convenient”. Our biggest mistake would be to ignore the lessons of history, act like this time is truly different, and try to build our knowledge and understanding from scratch.
This is a broader principle for all debate in the social sciences. Let’s not forget history, and let’s not forget that thinkers in the past were just as good at exciting thought experiments and “intuitive” forms of argument.