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Will taxpayers be forced to give more money to AIG?

December 12, 2008 by  

Another bailout in the future for AIG?The $85 billion bailout of AIG in September may have frustrated many taxpayers, but the government insisted that the move was necessary to prevent further economic turmoil.

Now, a new article in Reuters suggests that taxpayers’ role in funding the insurance giant may not be over, as the company’s recent behavior has not been in line with what it needs to do to survive.

According to the news provider, AIG has been aggressively cutting its rates to win business, even though experts agree that prices should be increased in order to ensure they are commensurate with risk.

Former CEO of AIG Maurice Greenberg told Reuters that the company is still playing dangerously.

"Cutting rates at a time when rates should be strengthening is a quick way to going out of business," he explained.

Meanwhile, others in the industry, such as Liberty Mutual CEO Edmund Kelly, have accused AIG of doing "some very stupid things in the market" that could eventually have even more of a destabilizing effect.

The article even suggested that if AIG’s tactics result in losses, the government may be forced to pledge further taxpayer funds to rescue the firm again.

AIG’s problems originated with its insurance of risky debts, such as mortgage-backed securities, against default.
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  • Bob Livingston

    Maurice Greenburg’s statement that AIG is “still playing dangerously” is dead accurate, but probably not what Greenburg intended to say. Remember their expensive junkets just days after receiving the Fed bailout? The entire AIG fiasco is a disgrace. The problem is that now the government is neck deep financially with AIG. To allow them to fail now would cast huge doubt over the US government. The govt cannot allow them to fail now.

    • Don Coe

      I have to disagree about not letting them fail. Read this article, click on the link for the video panel discussion, then reassess your opinions about AIG and many other financial institutions our government is supporting. It’s scary!

      http://www.onenewsnow.com/Legal/Default.aspx?id=355820

  • DAVID TALLEAGLE

    Why did Congress not bat an eyelid to bail out AIG with $85 billion but are slow to help USA auto companiesa with $14 billion? There must be something here below the surface? Are retirement & health plans of Congress handled by AIG and even retirement benefits of Congress involved in AIG??? Lat’s investiaget this issue deeper!
    DTE

  • http://www.SolutionsIEC.com Jason Yost

    It makes me sick to see these people get re-elected after promising “main-street” something better while bailing out a selective few “wall-street” companies like AIG. While they do this they put the american people further in debt. If anyone out there thinks that they won’t pay for it in the end with higher taxes and/or declining quality of products and services, they are sadly mistaken. This garbage going on within our federal government has to stop before the american dream is totally wiped out from our children’s heritage. Why are they so darned scared to let the markets correct themselves? Did they honestly think that they could continue to loan thousands (or more) dollars to eighteen year old kids in high school and other high-risk peoples and have it not come back around to correct itself? Did they honestly believe that they would set people up to fail like that, that people could just take advantage of that system and be that irresponsible, and nothing would ever happen? It’s been happening for years! No one said anything because they were all being selfish and lackadaisical about the credit industry practices all around!

  • Janet Rogers

    Go to “Act for America” web site and read the very disturbing lawsuit against AIG for its using Shariah financing and this article should answer all of your questions.

  • Linda

    If you want more information on AIG, go to http://www.worldnetdaily.com and read the article on “Bailed-Out AIG offers Islamic insurance to U.S.”. It is dated Dec. 5, 2008

  • Josette

    I think all these company’s should fall it’s their own fault they should be more wise about running a company why should we bail them out anyway let them all fall it will cause lots of job loss but at the same time we bail them out then a couple of years from now we have to bail them out again what the hell are you serious who’s bailing us out the American people yeah American not illegal idiots who come over to take everything from us god knows we’ve already bailed them out

  • Barry

    The problem with letting AIG and other similar groups
    fail is the middle American tax payers that are caught up in all this. Yes most people should have known better but I know Kids (25-27) that were talked into investing in a first home for their families. The home lenders and financers show numbers that look really good and they accepted. As we know the market went away, the value of the home went to less than what they owe, the inceased payment is about to hit in a year or so. No way to refinance as the home is worth less and the kids can not make the new inceased payment.

    Yes I know they should have know better but did you at 25–30?
    Without helping AIG, Freddy, Fanny, GM, Ford, Dodge how can we help these kids?

  • Bob Simmons

    I think that all of these huge companies should be broken up into smaller ones so that they can then be allowed to fail when the run their companies into the ground. You know as in capitalism not communism. They should demand that the money already handed out be returned if it was spent on the company officials trips to the spa. Also if they used the money to buy up other companies instead of loosening up the credit market. I am no longer proud to call myself an american.

  • Muhamad

    AIG is having very strange ties with Islam ,having a special 3 man advisory panel on the “keeping with islamic Shariia law ” /So you American are actualy helping a company that is working with the enemy as a way of making money .But if not making it –you pay .

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