Editorial: When will the bailouts end?
At first glance, the latest federal government bailout of American International Group (AIG) boggles the mind.
AIG, an insurance giant whose financial status has worldwide implications, received a new pledge of $30 billion from the feds on Monday. The latest infusion represents the fourth government bailout package for the company, with funds now totaling more than $170 billion.
Incidentally, AIG also confirmed Monday that it had just lost $62 billion in a single three-month period. So why does the cash continue to flow when it subsequently vanishes?
That's a question for economic analysts, which we don't necessarily pretend to be. But one expert -- Mark Williams, a professor of finance and economics and a former Federal Reserve bank examiner -- told the Associated Press that at least $200 billion more will potentially need to be given to AIG. "The government can't cut its losses because it is too far into AIG. It has no choice but to keep on pumping money into the company."
Given that perspective, should the government have gotten "in" in the first place? Many in the financial world say yes, but then there's the fact that oversight of how the bailout money is spent seems to be lacking.
And how many more bailouts can our country afford? And just who is going to bail us out, anyway?