Today the Federal Reserve and Treasury Department have decided to provide an additional $40 billion dollars to the failing and flailing AIG. This brings the total bailout to, wait for it...
$150 billion dollars of taxpayer funds. The largest bailout ever.
While the method and details are more complex than the simple number suggests, the basics of the NEW deal is that we have added $40 billion to the loan, lowered the interest rate overall and provided a longer payback period (from 2 to 5 years). The new CEO, Edward Liddy, explained today on CNBC that this will provide the breathing room needed to get the company on track and time to sell its assets at a better price. Since taxpayer own 79.9% of AIG at this point I hope Mr. Liddy can prevail. However, the likelihood of this happening is very low.
It appears that our government though its proxies (the federal reserve) will continue to trade good taxpayer deposited funds for shady "assets" including CDO's, CDS's and other alphabet soup derivatives that the markets are telling us are basically worthless at this point. As this mountain of liabilities piles up on the balance sheet of the Federal Reserve, our national wealth is evaporating.
What is next...$50 billion of our money to help the perpetually failing auto industry? Unfortunately for us the answer is yes.
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