Wednesday, March 18, 2009

The $165 million question

So now the government wants to get back the more than $165 million in bonuses that AIG paid its executives. Hmm.

AIG, in case you've been dead since last year, is the insurance company that the government now owns 80 percent of due to more than $170 billion (yes, billion) in bailout money that taxpayers have put into the firm to keep it from collapsing.

Today's New York Times has an excellent piece written by George Washington University law professor Lawrence Cunningham that explains all the legal ways AIG or the government could use to justify getting the money back. My question, though, is what would the government do with the cash once it has it back?

By all indications, the more than $1 trillion in taxpayers dollars already spent or allocated for company bailouts or economic stimulus so far haven't fixed the fundamental problems in the economy: a housing market that completely tanked and lending by banks to companies and consumers to keep the economy moving. Why not take the cash from the bonuses AIG paid and put it toward fixing those problems directly? The FDIC, for example, has already shut down or taken over more banks in the last 15 months than it has in decades. $165 million sounds like it would go a long way toward recapitalizing at least a few of them, no? How many home mortgages could be made at affordable rates would that kind of cash? How many entrepreneurs could use $165 grand, let alone $165 million, to help make a payroll or get a new product into production?


5 comments:

Mia6998 said...

I'm not worried about how the government would spend it/reallocate it...you already listed several options. I just want them to get it back...I don't care how they do, they gotta do it.

Mary said...

I am firm supported in our new administration but both the old and the new president were asleep at the switch...

Shame on AIG Excecutives they should reign or commit suicide...

I need a job where I can leverage the financial stabality of the free world, roll the dice, loose big, and get a big bonus at the end.

SHAKING MY HEAD

Butterrfly said...

Congress is hard at work drafting plans for legislation to tax said bonuses at a 90% tax rate..lol.. seriously, I really did laugh out loud, hit rewind, pressed play and laughed out loud again. The government giveth and the government taketh away. 90% tax rate for bonuses? Checkmate.

Mary said...

I sit corrected... My president is the man... I retract yesterdays comments... My president is taking responsibility for a mess he did not make...

Def not asleep at the switch!

Velvet Jones said...

Honesty, I'm not concerned. The AIG bonuses are a red herring. I'm saving my anger and venom for the banks and our government to ask them why they feel entitled to get billions and billions of taxpayer dollars to be made COMPLETELY WHOLE after effing up so majorly. They didn't just get enough to get on their feet, they got everything. The banks and government seems to be saying that they shouldn't have to be at risk for anything, which leaves us..the taxpayers, in a very craptastic situation.

So forget these bonuses, let's talk about why AIG, Merrill Lynch, and Goldman Sachs are sitting pretty with our money and not having to worry about damn thing, epsecially as our govnernment is poised to buy all their toxic debt.

People, we've got bigger problems than these damn bonuses.