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Federally guaranteed deposit insurance

By way of example, federally guaranteed deposit insurance did not exist before the Great Depression. Prior to the introduction of federally guaranteed deposit insurance, if a bank failed, depositors were out of luck.

Would we consider the presence today of federally guaranteed deposit insurance to be "a sign of intellectual confusion"?

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It isn't a sign of intellectual confusion but rather an insurance policy on assets. It is the only way the banks could convince customers to come back and deposit their ...