AIG Bailout
So the US government just gave AIG $85 BILLION to prevent them from going under. And they just put Fannie and Freddie in conservatorship too, how much did that cost? And NONE of it makes sense.
The Republicans like to talk about "trickle down economics." They feel if you give people more money to spend, they put it in the economy and strengthen it. Well, bailing out AIG and Fannie and Freddie etc are important things to do, we need those institutions to be healthy, but they did it wrong. They did that by giving it right to the corporations in trouble.
How about take $85 Billion and give it to the people who can't pay their mortgages to pay for their mortgages. Make loans to those people and send the money to the loan company. Those companies stay solvent, the homes don't go into foreclosure, the real estate values in the community don't sink, the people in those homes keep their lives in tact and have money to spend on their homes, kids, health care etc...
And then Fannie and Freddie stay solvent because they aren't writing off huge losses, and then AIG is in a better place because their investments in real estate derivative stocks don't depreciate and everyone wins.
Bailing out AIG or Fannie and Freddie helps those companies stay afloat, but the people who can't make the payments are still screwed and the problem doesn't end.
The Republicans like to talk about "trickle down economics." They feel if you give people more money to spend, they put it in the economy and strengthen it. Well, bailing out AIG and Fannie and Freddie etc are important things to do, we need those institutions to be healthy, but they did it wrong. They did that by giving it right to the corporations in trouble.
How about take $85 Billion and give it to the people who can't pay their mortgages to pay for their mortgages. Make loans to those people and send the money to the loan company. Those companies stay solvent, the homes don't go into foreclosure, the real estate values in the community don't sink, the people in those homes keep their lives in tact and have money to spend on their homes, kids, health care etc...
And then Fannie and Freddie stay solvent because they aren't writing off huge losses, and then AIG is in a better place because their investments in real estate derivative stocks don't depreciate and everyone wins.
Bailing out AIG or Fannie and Freddie helps those companies stay afloat, but the people who can't make the payments are still screwed and the problem doesn't end.
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