We already knew the government bailing out a private for profit company with tax payer money was wrong and would have dire consequences. The company is still bleeding money and continues to be bailed out. Now we have the government watchdogs telling us what we already knew.
Unfortunately, we have spent billions of dollars that could have benefited the majority of Americans vs a select few. I think that is why people are still angry at politicians on both sides of the fence. They betrayed us with their decisions and actions and that is why we are “voting the bums out”.
Market Watch:
WASHINGTON (MarketWatch) — The government’s actions in rescuing American International Group Inc. with a $190 billion bailout averted an economic collapse, but also continue to have a poisonous effect on the marketplace, a key government watchdog said Thursday.
“By providing a complete rescue that called for no shared sacrifice among AIG’s creditors, the Federal Reserve and Treasury fundamentally changed the relationship between the government and the country’s most sophisticated financial players,” the Congressional Oversight Panel for the government’s $700 billion bailout package said in a report. “Today AIG enjoys a five-level improvement in its credit rating based solely on its access to government funding on generous terms.”
According to the report, the markets have interpreted the government’s willingness to rescue AIG /quotes/comstock/13*!aig/quotes/nls/aig (AIG 34.22, -0.09, -0.26%) as a sign that there is a broader government implicit guarantee of the financial sector.
“The AIG rescue demonstrated that Treasury and the Federal Reserve would commit taxpayers to pay any price and bear any burden to prevent the collapse of America’s largest financial institutions and to assure repayment to the creditors doing business with them,” the report said.
The report added that it is unclear whether the government will ever fully be repaid by the insurance giant, pointing out that the Congressional Budget Office estimates that AIG will ultimately cost taxpayers $36 billion.
Rebecca Mader
Melissa Rycroft
Deanna Russo
Estella Warren
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