Afterword to The AIG Bailout

In the early spring of 2009, the author wrote an article on the federal government's bailout of American International Group Inc (AIG) entitled The AIG Bailout. The bailout was necessitated by AIG's disastrous multi-billion dollar bets on the US housing market that brought it to the brink of bankruptcy. At the time, AIG was the largest insurance company in the US. Because of its size and interconnectedness, and the fact that financial markets were already under serious distress, it was feared that AIG's failure would lead to the disintegration of the entire financial system. Hence the federal government stepped in with an $85 billion loan, with total aid ultimately reaching $182.5 billion. With the government's exit from AIG, you can now close the books on the AIG bailout. Certainly, one could view the bailout as a success given the financial markets did not collapse and the government actually made money. However, because it is not possible to know what would have happened if AIG had been allowed to fail, whether bailing out AIG was the right call will always be subject to debate.