Wednesday, September 17, 2008

Federal Government Nationalizes Insurance Company

With a tactic reminicent of Venezuela instead of the U.S.A., our federal government effectively nationalized its largest insurance company, AIG. In exchange for an $85 billion bridge loan for 2 years with 8.5% interest, we the people got an 80% equity participation stake in a once public company.

We have no business doing this. I don't care what the implications to the financial markets might be. Like Chrysler before, now we are saying that AIG is too big to fail. Let me assure you, AIG has a tremendous amount of assets that could be liquidated rather quickly to fund any short-term liquidity problem.

They passed on Lehman, but pulled the trigger on AIG...what's the logic in that? Our federal government is stacked and controlled by to few "fat-cats", and it's well past time to clean house.

This is not representative of our free market economy. It is representative of a totalitarian economy.


Jonathan said...

I believe the actual interest rate is 11.81%...even higher than 8.5%

Pamela said...

Amazing. I'm glad that Congress has put the skids on the bailout plan until they can check out the devils in the details.

Tou and David said...

Thanks for the info.