Anonymous
Anonymous asked in Politics & GovernmentPolitics · 1 decade ago

If we can no longer borrow, should citizens be forced to do community service at AIG?

maybe free office work on weekends at their nearest office?

That would have the same effect as giving them money, if our government can no longer borrow

Update:

If you really think it's any different than giving them money you have to work to pay for, you're kidding yourself

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  • 1 decade ago
    Best Answer

    [Last revised: January 18, 2008

    American International Group, Inc. (AIG), a world leader in insurance and financial services, is the leading international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo.]

    AIG is an example of allowing a company to become "too big to fail".

    This is what happens in the free market when one company becomes too big to compete with and starts gobbling up its competitors.

    Add to that some good old fashioned deregulation to allow them to trade in derivatives and suddenly there is a huge problem.

    [An AIG failure could have serious repercussions across the globe as its network of derivative contracts are held by banks, investment banks, hedge funds, insurance companies and mutual funds as well as multinational corporations.

    We're talking about big money. According to the International Swaps and Derivatives Association, the notional value of CDS totaled $62.2 trillion at the end of last year. These insurance contracts protect investors against default on debt instruments and they are a fulcrum of global financial markets. Since there is no clearinghouse to administer these transactions, in effect it is impossible to know who could be hurt the worst. A run on AIG, make no mistake, is dangerous to the underpinnings of the debt markets--more so than unwinding the web of trades at Lehman. Scary.]

    We can thank crooked Republican legislators, particularly Phil Gramm, for the Commodity Futures Modernization Act of 2000, and it predecessor Gramm-Leach-Bliley Financial Services Modernization Act for that.

  • 3 years ago

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