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Should AIG have been saved from bankruptcy?

C Yes, AIG needed to be saved, not as a favor to AIG and its constituents, but to avoid the collapse of the financial system. AIG had many many obligations to other firms. Had it failed it would have taken other firms with it and spread financial failures throughout the economy. The author likens the crisis to a fire. AIG was like a mansion burning. Unless you douse the fire, "save" the mansion, the fire could spread uncontrollably through the city taking with it other houses and lives.

Please note that even though AIG the company was saved, its shareholders (the owners) were not. They all suffered deep financial losses. In addition the rescue of AIG instead of costing taxpayers' money actually returned a profit to the federal Treasury.
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