When the Safety Nets Vanish: The Hidden Trauma of Economic Instability

“Dismantling financial safeguards isn’t just reckless—it’s an engineered crisis, designed to shift risk from the powerful onto the people. Stability isn’t a privilege. It’s a right. And we won’t let them take it without a fight.” - Mary Coughlin

What happens when the systems designed to protect us are dismantled? What does it mean for our collective well-being when financial security becomes a privilege instead of a right? The potential dismantling of the FDIC isn’t just a bureaucratic shift—it’s a seismic attack on the very fabric of trust, stability, and resilience in our society. And if we don’t pay attention, the ripple effects will be catastrophic.

The Illusion of Stability

For nearly a century, Americans have placed their trust in banks under the assumption that their deposits are safe. The Federal Deposit Insurance Corporation (FDIC) was created after the Great Depression to ensure that no matter what happened in the financial sector, ordinary people wouldn’t lose everything overnight.

Now, there is discussion about dismantling or restructuring the FDIC, raising serious concerns about the future of financial security for all Americans.

Let’s be clear: This is not just a policy debate. This is a fundamental shift in economic safety—one that affects every person who keeps money in a bank, owns a small business, or relies on financial stability to care for their family.

And here’s the kicker: The FDIC is not even taxpayer-funded. It is entirely funded by the banks it insures, through premiums they pay. Eliminating it doesn’t save government money—it only removes a layer of depositor protection. So if this isn’t about saving taxpayer dollars, what’s really going on?

Trauma Isn’t Just Personal—It’s Systemic

We often think of trauma as an individual experience—something that happens to a person, a family, a community. But trauma is also engineered at the systemic level.

When policies are designed to remove protections, increase instability, and consolidate power at the top, they create conditions of widespread trauma.

• What happens when a NICU nurse, already stretched thin, suddenly faces economic uncertainty because their hospital’s funding is slashed?

• What happens when a parent, already navigating the trauma of a critically ill newborn, loses their financial cushion overnight?

• What happens when small business owners, the backbone of local economies, are forced to close because they can’t recover from an unexpected financial collapse?

• What happens when communities in rural and underserved areas, already facing banking deserts, have even fewer protections?

The answer is simple: trauma compounds. Stress skyrockets. Resilience weakens.

And the people responsible for dismantling these protections? They may call it “efficiency.” But for those living with the consequences, it’s destabilization.

If This Isn’t About Saving Money, Then Why?

If the FDIC is entirely bank-funded, why would anyone want to dismantle it? The answer is simple: deregulation, consolidation of power, and removing financial oversight.

This move isn’t about making government leaner—it’s about removing guardrails that keep financial institutions accountable. By weakening or eliminating the FDIC:

• Banks gain more freedom to take risks—without the burden of paying into an insurance system.

• The government can consolidate financial oversight into political agencies, rather than independent regulators.

• The burden of economic crises shifts from financial institutions back onto individual depositors and small businesses.

This is not some routine policy adjustment. It is a deliberate attempt to rewrite the rules of financial stability in favor of the powerful.

B.U.F.F.E.R. or Break? The Choice Is Ours

The BUFFER framework isn’t just about individual resilience. It’s about designing systems that create Belonging, Understanding, Forgiveness, Frameworks, Equanimity, and Respect.

The FDIC is one of those frameworks. It ensures financial belonging by making banking accessible and safe. It fosters understanding by creating trust in the economy. It reinforces equanimity by buffering against financial catastrophe.

Dismantling or weakening the FDIC is a direct attack on these principles. It is a move that prioritizes short-term deregulation over long-term stability, risk over responsibility, and profit over people.

But here’s the thing:

This isn’t just happening to us.We are not just passive recipients of policy.We have a say in the structures that govern our lives.

Reimagining Resilience: What We Can Do

1. Refuse to normalize instability. Do not let this become just another policy headline that fades away. Talk about it. Call it what it is: systemic trauma.

2. Hold policymakers accountable—on all sides. Demand to know why protections for the powerful are expanding while protections for everyday people are disappearing.

3. Strengthen local financial resilience. Support credit unions, community banks, and institutions that operate on principles of trust and accountability.

4. Engage in civic action. No matter where you fall politically, financial security is a human issue, not a partisan one. Speak up, vote with awareness, and advocate for policies that protect long-term stability.

5. Reimagine governance as care. The policies we fight for should reflect the values of trauma-informed care at the societal level. That means creating and protecting structures that buffer against harm, not ones that manufacture it.

Final Thought: The Fight for Stability is the Fight for Humanity

The erosion of public trust doesn’t happen overnight. It happens through a slow dismantling of protections, a steady normalization of instability, a gaslighting of the public into believing that safety nets are “inefficient” or “unnecessary.”

We have a choice. We can accept this unraveling, or we can name it, challenge it, and resist it.

Because at the end of the day, this isn’t just about financial policy.

It’s about whether we build a world that buffers against trauma—or one that perpetuates it.

And that choice belongs to all of us.

What’s Next?

How does financial instability show up in your life, your work, your community? What protections do you see disappearing? Let’s talk about it. Let’s reimagine a better way forward—together.

[Join the Conversation in the Comments.]

With unshakeable resolve,

Mary