A reader asked yesterday how it was even possible that Bush could write a check to bailout AIG without Congress, since Congress is supposed to control the budget.
There was a great read yesterday about this point but after reading dozens of articles on the subject it's all a blur, unfortunately. One point made in that article was exactly that point. The fact that Paulson and a few others could just casually go to Congress (for a briefing) and then hammer out this deal with AIG only goes to show how weak the system has become. The previous system or regulations and procedures has been swept away because heavens no, we would never want to slow down a comfy bailout. Sure, there needs to be flexibility for urgent times, but let's not forget that there has been very little actual debate about taxpayers dishing out $600 billion - yes, $600 billion - in 2008. Wow. That's an amazing amount of money and we all know there is plenty more to come. (It's also doubtful that the American taxpayer will ever receive the AIG money back.)
So back to the $600 billion that we're on the hook for courtesy of the McCain-Bush credit crisis.
The federal government has pledged eye-popping amounts — more than $600 billion in the past year — to bail out, or help bail out, some of the biggest names in American finance. The latest was American International Group Inc.
Now the credit crisis is starting to tax even the Federal Reserve's deep resources.
On Wednesday, the central bank took the unprecedented step of asking the Treasury Department to sell debt on behalf of the Fed. The first of those auctions raised $40 billion, and two more to raise an additional $60 billion are scheduled for Thursday.
