Someone needs to ask McCain if the fundamentals of the economy are still strong even after this↓

US government rescues insurer AIG (Sept 16, 2008)

The US Federal Reserve has announced an $85 billion (£48 billion) rescue package for AIG, the country's biggest insurance company, to save it from bankruptcy.

The plan involves a loan in return for an 80% public stake in the company.

The rescue follows Monday's collapse of US investment giant Lehman Brothers, which caused share prices to plummet across the world's financial markets.

Meanwhile, Barclays said it had reached a deal to buy Lehman's US investment banking and capital markets businesses.

The rescue of AIG - which has a trillion dollars in assets and insures bank loans around the world - prompted a shares rally in Asia, with Japan's market up 2% in early trading.

The board of the Federal Reserve made the decision "with the full support of the Treasury Department", it said in a statement, adding that the secured loan included conditions designed to protect "the interests of the US government and taxpayers".

Emergency meeting

US Treasury Secretary Henry Paulson refused to bail out Lehman Brothers, the fourth-largest investment bank in the US.

Correspondents say AIG's demise would have a far greater impact on the world's financial markets than Lehman's.

Many banks and investment funds in the US and around the world would lose their insurance cover at a time when defaults on payments are likely to rise.

Treasury Secretary Henry Paulson and Ben Bernanke, the chairman of the central bank, the Federal Reserve, met senior members of Congress late on Tuesday to brief them on the bailout.

The plan calls for the government to seize up to 80% of AIG and remove its management, similar to the way it took control of mortgage giants Fannie Mae and Freddie Mac.

US President George W Bush welcomed the package, and the White House said the deal was made "in the interest of promoting stability in financial markets and limiting damage to the broader economy".

Market slump

Meanwhile, the Fed has left interest rates unchanged at 2%. The BBC's Matthew Price in New York said the bank had clearly decided an interest rate cut would not help to alleviate the short-term financial crisis.

On Wall Street, the Dow Jones rallied on Tuesday, closing 141 points higher having on Monday suffered its worst day's trading since the September 2001 attacks on the US.

But leading indices across Europe and Asia ended lower, with banking shares being the worst hit. Shares in Britain's biggest savings group, HBOS, initially dropped 35% before closing 22% down.

Central banks around the world responded by carrying out emergency measures to keep markets liquid.

The Bank Of England and the Bank of Japan injected £20bn (25bn euros; $36bn) and 2.5 trillion yen ($24.1bn; £13bn) respectively into their money markets.

The extra funding came as the interest rates at which banks lend to each other rocketed - as they did at the start of the credit crunch.

I'm not an expert on what's going on, but as TIME pointed out, if the other financial institutions were more like Freddie Mac and Fannie Mae the current crisis may have been averted. The FMs were more regulated than the other institutions.

Going after those two companies was going after the wrong targets entirely.

Also:

4. federal bailouts of businesses (such as feddie mae/frannie mac)
Obama - help homeowners shore up mortgages rather than bail out companies
McCain- too big to fail, bail out companies not speculative homeowners who are whining now

Obama and McCain have the same stance on Freddie Mae/Frannie Mac: both want to bail them out. Obama recently said "the housing market has all but collapsed. Fannie Mae and Freddie Mac had to be effectively taken over by the government".

This is probably one of the most important issues in the economy today--if you bail out one business--you have to bail them all out. And if you bail out every failing business what you are left with is communism.

>> ^BillOreilly:
Oh the irony, Lansing is the capital of Michigan, run by what? Oh that's right, a DEMOCRATIC canadian wench for a governor who has tried (and mainly succeeded) in running the state into the ground.

Sure, Bill, and she was also responsible for Enron, Worldcom, Tyco, Fannie Mae, Freddie Mac, Lehman Brother...oh, wait, she wasn't.

And those banks that gave out all of those bad loans, they're all owned and run by a bunch of liberal Democrats, too, I guess.

Oh! And the Democrat in Lansing is responsible for sending our troops to Iraq at the cost of half a trillion dollars (and counting), and she's in cahoots with other liberals like KBR and Haliburton and Blackwater who have a history of overcharging for their services, too.

Yeah, it's all her fault.

I don't want taxes to be LOWERED for the guy making 600,000 dollars, I want it to stay the same. Barack wants to balance the cuts to the lower classes by raising them for the rich. I think they should cut lower income tax rates and leave the higher tax brackets the same.

I'm just splitting hairs here.

I HATE the fact that the FED is making us pay for the mistakes of Freddie Mac and Fannie Mae. I didn't default on my loan. More importantly, I didn't buy loans that were high risk. This is a terrible solution. All they are doing is sticking a band-aid on it so that the next president will have to deal with it.

I would say that I have a conservative view on the economy, except that every republican President for the past 20 years has broken his campaign promises when it comes to the economy. I'm torn between voting for somebody based on what they say they're going to do, and what the party has traditionally done once in office. If the republicans would keep their economic promises, I'd be 100% behind them. I just don't know what to believe anymore. I do think the eonomy thrives when most things are left up to the market. The gov't doesn't need to pour money into the economy every time there is a lull.

In reply to this comment by NetRunner:
Sounds like we're essentially in agreement about drilling -- I think we'll need to do it eventually, but I think the longer we put it off, the better off we are, not only environmentally, but also with regard to what kind of returns our country can get for it.

About taxes, I'm not really worried about the guy making $600,000, but only winding up with $300,000 after taxes.

I'm very worried about people with less than $50,000, and moderately worried about people with less than $100,000.

Can you really justify asking more from people making $45,000/yr, in order to let the $600,000 income guy keep another $100,000 in taxes?

Republicans & supply siders always say "well, people with huge money hire people with their excess money"...well, so does the government, and while there's more than a little corruption, what's called corruption in government is often called "rewarding success" in the corporate world.

Past a certain point, people are just using their wealth for investments, and while there's an argument to be made about those investments helping the economy, the economy also just got saved by a government take over of Fannie & Freddie that puts the failures of these supposedly infallible investors on the backs of taxpayers.

I didn't benefit from the boom (I don't have real estate investments), why should I bear more of the burden from the bust?

In reply to this comment by deedub81:
You're absolutely right to criticize those who promise lower gas prices in exchange for leasing federal land to oil companies. It's a lie.



I don't agree with that large of an increase in tax on individuals earning more than $600,000. Their taxes would increase by more than $100,000 up to $700,000. That's a potential 19-24% increase from what is already the highest tax bracket. He's only proposing an additional cut, at the most, of $75 per month less than what McCain's tax plan is (that's only for one bracket). Whose plan is more fair in my opinion?

I believe that people earning below $30,000 should only have to pay a minimal tax, but I don't believe that others should have to pay 40-50% tax, regardless of how much they earn. It's just not right.

This is why voting republican is like voting to have someone shit down your throat:

"Under the terms of his employment contract, Daniel H. Mudd, the departing head of Fannie Mae, stands to collect $9.3 million in severance pay

Richard F. Syron, the departing chief executive of Freddie Mac, could receive an exit package of at least $14.1 million"


Daniel Mudd has donated over $15,000.00 to the GOP since 2000.
Richard Syron is part of the NRCC, and has donated over $22,000.00 to the GOP in 2008 alone.


So deedub, why the hell are you trying to pin this on the "librul media"? WTH are you on man? The proof is right in front of your face, and you're trying smoke-n-mirrors on us?

>> ^deedub81:
I'm livid! I didn't default on my loan!

Then why do you keep voting Republican because it is due to them that big companies like Feddie and Fannie (Enron, Worldcom, etc.) were able to get away with this shit.

Because they insisted that there could be no "free market" if the government was regulating them to make sure they didn't make such stupid ass mistakes and/or blatant thefts.

>> ^quantumushroom:
Those whining that America ain't free...are free to leave.


those seeking to take my freedom, are free to lose their lives.

I don't know which republican way you're talking about. It's the FED way. All the republicans that I talked to yesterday and today are pissed!

Remember Kenneth Lay? The CEO's of Freddie and Fannie should be held accountable- Not the American tax payer. I heard one estimate that it will cost tax payers up to $1.6 TRILLION!!!

I'm livid! I didn't default on my loan! Why do I have to pay for somebody else's bad call.


>> ^rougy:
Privatize the profits, socialize the losses.
It's the Republican way.

Tags for this video have been changed from 'ron paul, freddie mac, fannie may, housing bill, congress, constitution, freedom' to 'ron paul, freddie mac, fannie mae, housing bill, congress, constitution, freedom' - edited by my15minutes

The CEO of Freddie Mac made 20 million last year as the companies value dropped in half, and then teetered down to the bailout. I'm so glad our tax dollars are funding these CEOs.

I live in a Republic, not a Democracy nor an Oligarchy. The Government should not get involved. The people should loose their house if they can not afford it. Others , ( the American people) should not have to pick up the slack because they were sold a load they can't afford. Also, Fanni Mea and Freddie Mac and Bear Stearns all should fall or bear the weight of their decisions, not the public.

If you dont know what a Republic, not a Democracy, Oligarchy is the you owe it to you self and your country to find out. Here is a link to a 30 minute clip. Watch it and learn.

http://video.google.com/videoplay?docid=6732659166933078950&q=overview+of+america+site%3Avideo.google.com&total=81&start=0&num=10&so=0&type=search&pli
ndex=0

If it does not work the go to google video and search " Overview of America "


You owe it to yourself.

I think Fannie Mae and Freddie Mac need to get a room and make some more money babies.