Rasmussen: Bailout Hurt Economic Confidence

A new Rasmussen Reports poll out Wednesday found that almost half of voters say the recent government bailout of Silicon Valley Bank hurt their confidence in the nation’s economy.

Forty-nine percent said they have less confidence in the economic system after President Joe Biden announced the government would guarantee all deposits following the bank’s failure.

Just 20% said the bailout made them feel more confident in the economy, and another 27% said it did not make a difference in how they felt about the economy.

The survey of 964 likely U.S. voters was conducted by Pulse Opinion Research LLC between March 22-23 and has a margin of error of +/- 3 percentage points, according to Rasmussen.

Federal Reserve vice chairman for supervision Michael Barr testified in front of Congress this week and told lawmakers that the “inadequate” risk management and internal controls led to the institution’s sudden collapse earlier this month, CNN reported.

“SVB’s failure is a textbook case of mismanagement,” Barr said in testimony in front of the Senate Banking Committee this week. “The bank waited too long to address its problems; and, ironically, the overdue actions it finally took to strengthen its balance sheet sparked the uninsured depositor run that led to the bank’s failure.”

Just three days after the failure March 10, Biden addressed the nation to let them know that depositors with more than the government-insured Federal Deposit Insurance Corp. $250,000 limit would have access to their funds.

“On Friday, the government regulator in charge, the FDIC, took control of Silicon Valley Bank’s assets. And over the weekend, it took control of Signature Bank’s assets,” Biden said March 13. “First, all customers who had deposits in these banks can rest assured … they’ll be protected, and they’ll have access to their money as of today. That includes small businesses across the country that banked there and need to make payroll, pay their bills, and stay open for business.”

Of the voters included in the Rasmussen poll, 48% said they trusted Republicans more to handle the economy, with 44% saying they trust the Democrats more.

Unaffiliated voters said they trusted Republicans more with the economy, 47%, compared to 33% trusting Democrats more, according to the poll.

According to the CNN report, the California bank failed in part because it had invested in long-term bonds yielding an average of 1.79%, which ended up losing more than $1 billion as interest rates increased during the past two years, deflating the bank’s portfolio.