For the first time EVER the Fed's are bailing out a major insurance company from going bankrupt. A MAJOR company. When I read the headline I couldn't do anything except stare at the computer screen and blink dumbly. A.I.G is being given an 85 billion dollar loan by the Federal Reserve to keep them from filling for bankruptcy. I knew that the economy was in trouble but when major corporations like A.I.G need the government to fix them...we are worse off then I thought. And as this Times article states:
"...the bailout is likely to prove controversial, because it effectively puts taxpayer money at risk while protecting bad investments made by A.I.G. and other institutions does business with."
Overlooking the typo at the end of the sentence this is a super good point. Why should taxpayers have to put money at risk because A.I.G made bad investments? Unfortunately I do understand the highly negative repercussions a company like A.I.G filling for bankruptcy would cause, I just wish their was a better way for the problem to be resolved. Congress is even considering building a new government agency thats sole purpose would be to buy out failing financial companies (Times article here). It seems like a catch 22 to me, such an agency might allow for corporations to make riskier investments but no one wants to watch the market crumble as those corporations fall.
All in all, no matter who gets the White House this November (please, please let it be Obama) they are inheriting a rats nest of problems.