The bailouts

"AIG's bailout brings to about $700 billion the total of U.S. rescue efforts to stabilize the financial system and housing market"

link

"AIG's rescue calls for the U.S. Federal Reserve to lend up to $85 billion to AIG for two years in exchange for a 79.9 percent equity stake."

"AIG will pay interest at a steep 8.5 percentage points above the three-month London Interbank Offered Rate, making the current rate equal to about 11.4 percent."

Is the government waisting tax payers money or getting assets at fire sale prices? Time will tell. Given the consequences of failure, maybe the government had no choice. Given the risks involved, no other company could absorb these troubled companies. But it seems to me, that unless there is great amount of underlying fraud, this appears to be just a crisis of confidence. Which means the government, because of it's ability to raise cash, may in the end make a lot of money.