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In response to
"This is what bugs me about the AIG fiasco. Why is America shouldering the whole friggin burden!? From their annual report:"
by
Banzai!
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While the fact that AIG is to a large extent an American owned company, that in and of itself isn't enough to justify the burden being borne by the US
Posted by
Loyola
Mar 11 '09, 15:44
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taxpayer oweing to the fact that the consensus was that its failure would result in global financial meltdown, so I agree with you to an extent in that regard.
However, America's standing as such meant that it was probably the only country able to react in the way, and speed, with which it did to "save" AIG initially with the 130 billion initial injection albeit under onerous loan terms (since revised. That decision (to save)was made by the US alone, as only it could and although much of the losses were incurred via subsidiaries of the parent company, the parent company was domiciled in the US, under all its laws and financial regulation (or lack thereof as the case may be)
So is there a case now for the international community to pay to some degree towards the AIG bailout? Absolutely. But this isn't a one world government and consensus between nations is next to impossible to achieve, so I wouldn't hold out hope of other nations pitching in, especially in an environment where QE is the order of the day and in the absence of aversion to relatively large scale deficits (together with the advantage of being the world's reserve currency). The decision to save AIG was, rightly or wrongly, made by the US alone, and as such, is now their proverbial baby.
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