Con: Describe/define the political

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The bailout of AIG was necessary to stabilize the economy and secure the welfare of the


Con: Describe/define the political issues associated with resolution from con side A. Abuhamda: 0235

Many arguments have been proposed for and against the idea of the 700 Billion dollar bailout to rescue these foundational financial entities consisting of the largest within the country. AIG, the American Insurance Group, insured pools of loans traded on Wall Street for companies like the GSE’s, which are government supported enterprises like Fannie Mae and Freddie Mac. This toxic trio contributed to the consequences presently being dealt with pertaining the nation’s financial collapse.

Two main arguments

1) Bait and Switch proposal: The initial proposal for AIG Bailout consisted of bailing out troubled asset agencies with definitive sections protecting the consumers on the surface level of the economy as well, which were never addressed.

2) Unethical business practices discovered by federal sector in regards to bonuses.

Con: Identify supporting data and/or evidence of political position A. Kroll: 6566

From a political point of view an intervention from the government in the free market has always the consequences, that the successful or smaller market participants have disadvantages. It´s against the idea of the capitalism. Additionally bailout is always a big risk for the government, when the companies’ aren´t able to pay back their debts and the taxpayers take the blame. In the past examples show that bailouts can make the problem even worse.

Con: Describe/ define the economic issues associated with resolution. B. Pschunder: 7034

I will argue against the bailout of AIG and that it was not necessary to stabilize the economy and secure the welfare of the Republic. In this context I will deal with the economic issues associated with the resolution. There are several arguments against the bailout. But I will concentrate on the main economic issue: the moral hazard problem and furthermore compare AIG to Lehman Brothers. Another point is that the collapse of AIG was happening in consequences of their own failure.

Con: Identify supporting data or evidence of economic argument of con side.

  1. Erlenbech: 6514

Failure is an essential aspect of capitalism.AIG was aware of their risks with the CDS, but it was too greedy making huge profits.Therefore it should bear the costs of its mismanagement and not call for a bailout. Instead of bailing out the Wall Street especially AIG the government should invest in other economic sections. Counterparties were paid in full and AIG also paid millions of bonuses.
Con: Consider the opposition argument and identify its limitations, flaws and inconsistencies. D. Rivera: 8140

"We have no choice but to stabilize AIG or else risk enormous impact, not just in the financial system but on the whole U.S. economy" Ben Bernanke, Chairman of the US Federal Reserve. How this can be morally justified is beyond comprehension. The TARP (Troubled Assets Relief Program) was created by the US government to purchasing the toxic assets and to help stabilizes the failing banking industries, but it should have never come down to this. Firmer regulations on Wall Street and corporations like AIG are needed now more than ever.

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