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That is a stretch, the FDIC is ultimately funded by the US government. (crossposted with UGAalum)
AIG has already been propped up by the government. The failure of AIG, being a global insurer, would have had worldwide implications. That is why the G7 pressured the US government into the bailout.
The government tried to stop the bleeding by capriciously bailing out some and letting others fail, but the hemoraghing continues, and this big $700 billion bailout (although the negotiated bill was better than the first draft), may or may not be the cure (or 1st step to a cure). BUT, it will get the bad debt off the books of lending institutions, thus freeing up dollars to lend as loans.
There will be more oversight, it will be harder to qualify, but at least there will be money in the market (and not in people's mattresses) to loan.
Last edited by srmom; 09-29-2008 at 06:30 PM.
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