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Taxpayers Fund AIG Lawsuit Against US
AIG, now infamous for their executive bonuses, has decided that the $200 billion they received from the government is not nearly enough and is suing the government for the return of $306 million in tax payments. "AIG is effectively suing its majority owner, the government, which has an 80 percent stake and has poured nearly $200 billion into the insurer in a bid to avert its collapse and avoid troubling the global financial markets. The company is in effect asking for even more money, in the form of tax refunds. The suit also suggests that AIG. is spending taxpayer money to pursue its case, something it is legally entitled to do. Its initial claim was denied by the Internal Revenue Service last year."
Are these guys intentionally trying to force Congress to shut them down? Too much more of this, and economy or no economy, lawmakers are just going to say "Fuck you, die die die" and let the international banking system take a nosedive.
I have been (somewhat) onside for giving Wall Street a helping hand, but between the sheer incompetence of the Democrats and the sense of entitlement of these guys, I think it's time to say "Screw it", let them all sink, and then rebuild it properly, with laws requiring all bonuses be voted on by shareholders, all executives and managers be forced to convert their stock to non-voting, requiring complete replacement of any company's board and senior executives the second they take a single penny of taxpayer money, and putting their legal departments under direct Treasury control.
The world's burning. Moped Jesus spotted on I50. Details at 11.
The income tax system has become so complex with so many loop holes the not even the Treasury Secretary could master it. The problem of tax loss selling in particular is set to explode. Time to replace it with something much simpler like Fair Tax.
I don't think you understand the term "systematic danger". Lets do it in computer science speak:
You have a run away critical process somewhere in your critical system. It is eating memory like mad. It will take down the whole system when you run out of memory. Do you
1: Try to expand the memory for it, even at the cost of less critical applications, while you sort out the problem.
2: Do nothing and wait for the whole thing to come crashing down.
3: Begin looking for who ever wrote the crap to take away his bonus for successfully completing the project last year.
Basicly, letting AIG fail would not just crash the American economy. It would crash the world economy. As in NO MONEY IN THE ATM crash. As in NO FUEL FOR YOUR CAR crash. It might cost billions, but the alternative is far worse. Think Zimbawe. They have been allowed to grow too large to fail, and there is no way out of it except to keep them alive until they can be split up and sold.
What you should be asking is why the Republican party is still against nationalization of banks... Because currently, the taxpayers get to enjoy all the risk, while the owners of the banks gets the profits. And that is not a matter of a few million dollars to the executives. That's a matter of many billions. Being too large to fail is very very profitable.
Look at the Swedish bank crash of 1992. Notice that the Swedish taxpayers actually came out of it with a profit, after nationalizing several failing banks. But that is not what the US is doing. While you are busy arguing about a few millions billions are being pulled from under you.
Please stop being a sheep.
You are right - it reminds me of when folks were rejecting the entire budget because it was 2% earmarks. 2%.
In any case, this lawsuit seems very strange. If AIG "wins" the lawsuit, then the IRS pays AIG - but since AIG is 80% owned by the government, then 80% of that money would essentially go to support the government's investment in AIG (and could conceivably be used to pay dividends back to the entity from which the money was taken!).
I suspect that the lawsuit is really about specific business practices that AIG would like to continue using in the future (assuming AIG continues to operate in the future) and would like to establish the tax-free status of those practices.
The bonuses are unseemly, true, but they seem to be guaranteed by the employee contracts, and so all the yelling in the world by unhinged congressmen are not going to change anything. Plus, financially, they're an insignificant part of the bailout moneys. I wouldn't mind businesses reeling in the bonus amounts in the future, because of public wrath, but I fear that congress is preparing the public to ram through something like even more punitive taxes.
Then is it just me that noticed a 90% tax rate bill actually get passed just a while ago; 90%, specifically to tax these bonuses. It looks like their anger is changing quite a bit.
How do you kill that which has no life?
If they had failed, a dozen other companies would have risen to offer the same services, but in competition with each other. There would have been a short period of pain - the birds that nest in the tree would have been put out, the apes that ate its fruit would have to look elsewhere, etc, but it would have been okay.
Sometimes the old trees in the forest get rotten and need to fall, so that the new saplings can flourish.
Hey, at least it's not a car analogy.
I'm curious how damage is being done to the company in loss of good will. I certainly wouldn't be surprised if the outrage caused by this lawsuit alone didn't cost them much more than $300M. I'm not sure whether the whole fiasco will cost them more than $200B, probably not, but I know many people who won't do business with AIG ever again if they can help it. Sometimes money grubbing is a bad business move.
$410,000,000,000*.02=8,200,000,000
Or about 20 bridges to nowhere
Seriously, if you have a sick and injured animal, you try to help it recover. But if that animal is deemed unfit to coexist with people and other animals... like food aggression, attacking people, or literally biting the hand that feeds it...
Well, that animal needs to be put to sleep.
It's irrelevant what the $$ amount is, if the sole purpose of the company now is to keep sucking money into it's expenditure hole and apparently tossing back up this kind of behaviour.
Even if the company survives the economic issues we're living in, would the company itself be viable as a service company, given the kind of image/pr suicide it's been committing?
Forget about too big to fail. Let's start looking at companies that are too tained/corrupted to be allowed to succeed.
Winged Power Photography
>>>Which will either head off deflation (never in history been successful) or cause hyperinflation
I wish economists would call this phenomenon with a better description. If a government starts printing tons of paper money, it doesn't cause inflation of prices. It causes *devaluation* of the paper until soon people are walking around with wheelbarrows to buy a loaf of bread.
To use the word "inflation" is akin to a doctor claiming illness is caused by a runny nose. No, the nose and the price inflation is the symptom. The cause is the bacteria and the devaluation of the paper, respectively.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall