Why does AIG get handed money but GM and Chrysler have to explain themselves?

  • Thread starter Thread starter ben
  • Start date Start date
B

ben

Guest
Because AIG gets 100 billion with barely any questions and then they misuse it but when GM and Chrysler need it they have to go and explain themselves and everyone gets mad at them. I just don't understand it.
 
It is not as simple as you have just stated it. The government did not just hand them the money and they might have misused some but it is not an all or nothing situation. You need to get your info from a variety of recourses not just yahoo news, before you make conjunctures about America's economy.
 
The plain answer is: AIG owed insurance payouts to many institutions that may have gone broke if they didn't receive them.

Governments generally don't think about whether a company deserves a bail out, but rather how strong the flow on effects would be if that company went under. And in the financial industry companies are so interlinked that the flow on effects of one going bust can be massive.

No companies that go bust deserve bail outs. It foster moral hazard. But if the whole financial system is at stake, I would prefer a company to be bailed out.
 
Back
Top