American International Group, AIG, one of America's largest
insurance corporations, has been hit hard by the current economic crisis and
received more than $170 billion dollars from the U.S. government in an efforts
to make sure that the company does not go into bankruptcy.
AIG first received $85 billion dollars on September 16, 2009 when AIG
suffered a 'liquidity crisis'. At the time, it was the largest bailout in
history of a private U.S. company and resulted in the Federal Reserve Bank
owning about 80% of the company.
On October 9, AIG was granted another loan by the Federal Reserve;
this time for $37.9 billion dollars. On October 30, 2009, it was reported that
AIG had spent $90 billion of the $123 billion dollars lent to them.
AIG has been trying to sell-off assets to repay the loans, however, AIG has
continued to lose money. On March 2, 2009, AIG reported that it had lost about
$61.7 billion dollars in the final three months of 2009. This was the largest
quarterly loss of any corporation in history. A day prior to this announcement,
AIG was granted another loan of $30 billion dollars by the U.S. Treasury
Department.
The U.S. Treasury Department has assured the world that it will not let AIG
fail. The government has committed to giving the insurance giant more money to
assure that the company succeeds. The risk to the U.S. and global economy would
be extremely high if AIG is to fail. This is because millions of people use AIG
as their insurance company and allowing AIG to fail would mean costing millions
of people their insurance.
AIG received a fourth bailout making their total loans from the U.S. government
to be $170 billion. AIG has been under increased criticism from both the public
and the White House (including president Obama) for the payment of large
bonuses to key employees even as the company continues to lose billions of
dollars daily.