AIG, saved by US bailout, now considers suing US government
AIG may join a lawsuit alleging that the terms of the US government bailout were unfair to investors, but such a move risks infuriating the taxpayers whose money saved it from ruin.
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The US Treasury, for its part, has asserted that the bailouts of banks and firms like AIG largely worked. They helped to prevent the financial crisis from deepening, and much of the money has been paid back.Skip to next paragraph
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"Taxpayers have recovered nearly $375 billion – or nearly 90 percent – of the $418 billion in TARP funds disbursed to date," the Treasury said in a November report to Congress. Since then, the AIG rescue has concluded, as the Treasury concluded the sale of an equity stake in the firm, which it had taken as part of the rescue package.
Some finance experts had predicted that AIG would end up as a net loss for the government. Instead, turning a profit represents a major victory for the bailout program known as TARP (Troubled Asset Relief Program).
Most large banks paid back their TARP loans fully, turning a profit for the government.
Other large bailouts remain money losers, however. Automakers GM and Chrysler ended as rescues that imposed significant taxpayer costs – even as they helped to preserve many jobs that might otherwise have been lost.
"Taxpayers across this country saved AIG from ruin, and it would be outrageous for this company to turn around and sue the federal government because they think the deal wasn’t generous enough," Senator Warren said. "Even today, the government provides an ongoing, stealth bailout, propping up AIG with special tax breaks – tax breaks that Congress should stop. AIG should thank American taxpayers for their help, not bite the hand that fed them for helping them out in a crisis."
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