The U.S. government announced this week that it would infuse $250 billion from the $700 billion bailout bill into the country’s banks to help shore up the economy. But it’s apparently not an idea unique to this administration.
It was done once before, in 1932 during the Great Depression. While this Associated Press article says at that time, the money invested in bank stocks was paid back ($1.1 billion), I’m not counting on that happening now.
Neither am I counting on this version of the program to stay its intended course. Created in 1932, the Reconstruction Finance agency initially was to help banks in crisis, but expanded to subsidize farmers, other businesses and World War II, and also got involved in the gold market. I’m afraid I see that happening again in 2008.
