Daily Archives: September 17, 2008

Fed’s to benefit out of AIG Loan

Here is how

1. Common man pays tax

2. Tax is collected by IRS

3. IRS deposits the money into US Treasury.

4. US Treasury issues securities against that money which is utilized by Federal reserve

5. Federal Reserve has issued a loan of $85 billion to AIG and in return AIG would (hopefully) return the principal and the interest. Thus benefiting from the loan.

But the question is is that is this how a capitalist economy should work?

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Filed under AIG, Business, Capitalism, US