OMG: unemployment easily could have hit 25% if AIG failed?!?!
By Daniel at 27 January, 2010, 2:06 pm
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Paulson: “25% of my banker friends would be out of work, if we didn’t bailout AIG at 100 cents on the dollar!”
Me: “5% unemployment rate WITHOUT Paulson!”
“‘The company faced mounting losses, and it faced potential ratings downgrades which would trigger tens of billions of dollars in collateral calls which, without an equity infusion, would have led to its failure?a failure that would have collapsed our financial system and devastated millions of Americans,’ he said in prepared remarks.
Paulson added that the actions taken by the Fed and the Treasury kept the company from failing and making the fragile economy worse.
‘Although the road to complete recovery is slow and unemployment is still high, had AIG failed I believe we would have seen a complete collapse of our financial system, and unemployment easily could have risen to the 25% level reached in the Great Depression,’ he said.
‘The government rescue of AIG in the fall of 2008 was directly shaped by these realities,’ he said. ‘We had to protect the economy and the finances of millions of Americans; we could not have anticipated the magnitude of AIG’s problems; and we had no way of letting it fail without disastrous collateral consequences. We had to intervene, and I am thankful that we did.’”
http://forex.daemonnews.org/2010/01/27/political-paulson-bailout-of-aig-avoided.html
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