For the fourth time in six months, the federal government is giving billions of taxpayer dollars to AIG, following the latter’s announcement of a $61.7 billion fourth quarter loss — this despite the massive bailout shoveled AIG’s way by the Bush administration last September. By the terms of this latest lifeline (“life support” would be a more apt metaphor, since the patient has been clinically dead for many months), the federal government is extending an additional $30 billion in loans to the former insurance giant and allowing more lax repayment terms on an additional $38 billion credit line from the Federal Reserve.
The U.S. economy shrank at an annualized rate of 6.2 percent in the final quarter of 2008, almost double the 3.8 percent contraction in Gross Domestic Product (GDP) estimated by the Commerce Department last month. GDP is the sum of everything of economic value created in the country during a year.
Figuring prominently in President Barack Obama’s newly released budget proposal for fiscal 2010 is another massive bank bailout. The Bush administration’s gargantuan $700 billion bank boondoggle was bad enough, but President Obama, not to be outdone, is proposing a positively pantagruelian $750 billion in additional relief for America’s beleaguered money-center banks.
President Barack Obama outlined a financial plan in his February 24 address to Congress that meshes eerily with the fascist economic plan Benito Mussolini enacted after his ascent to power in Italy before the Second World War.
Though the Obama administration continues to deny it, the U.S. government continues to move closer to nationalizing the nation’s largest banks. The last week of February the Federal Reserve and the Treasury Department both announced that the federal government may convert the shares of preferred stock it already owns in Citigroup and other banks into common shares, thereby acquiring voting rights and a greater measure of outright control over the institutions.