I just got this in an email and though its crazy to think about what do you guys give this plan? Best thing I've ever heard of which of course means the feds will be against it. Sure would solve alot of social ills though.
Problem with that is AIG's default would mean that local bonds would become much more expensive to issue, no one else can cover them all, and they would have to offer higher interest rates to offer them to the public GA.
I know it's not to be taken seriously, but if the citizens were so great with their money they wouldn't need as much insurance that's out there causing aig to collapse I can see lots of TVs, vacations, cars and such being purchased tho.
it's not really the insurance part of AIG's business that is hurting... Insurance is one of their cash cows... that and airline leasing. They actually are a conglomerate that involves in many aspects of many industries. i'm against bailing out companies that screw up, but AIG didn't screw up. their usual lending lines have been shrunk or removed due to the credit crunch and capital running out from their lenders. AIG did nothing wrong, really. you guys should keep this in perspective. when investment banks like lehman, bear, and others have screwed up by leveraging their balance sheets 40 to 1, THEY are the ones that have screwed everyone. AIG was just a legitimate victim due to no cash being left for their practicies. I am vehemently against bailing out the investment banks. let dead dogs lie. AIG is such a big company that has worldwide reaches (in over 100 countries), that if we let it fail it would send our economy into a straight-up depression....and would probably send economies around the world in a serious recession. the company is THAT big. NO it wouldn't destroy economies, but it would be a serious disaster.... the other difference here is that the AIG bailout was a loan.... AIG was given time to sell off subsidiaries to pay off this loan. the loan is at a horrendous rate (something like 11% APR to the Fed).... so while the investment banks were getting free write-offs through acquisitions and bankruptcy filings, AIG is having to pay back our government at a very high rate... which means we'll get that $$ back (and make money). in summary: AIG bailout - necessary Lehman, Bear, GS, Merrill bailouts - unnecessary and shouldn't happen
Lehman Brothers didn't get bailed out. The 100+ year old company was wiped out completely in Bankruptcy and the pieces left over were bought at 10 cents on the dollar, it's sharholders? wiped out. Same with Bear. Goldman Sachs ian't even close to being in the conversation. Merril Lynch, acquired by BoA, not bailed out (by the Government, although the gvmt gave BoA a nudge). AIG? Bailed out w/an 85 billion dollar loan (and was necessary for all our livelihood). Bailed out is becomming the chic and sexy term to use but it's not accurate. Most of these firms outright failed, many many jobs were and mucho dinero was lost.
