Fiscal Responsibility

Meanwhile, the losers in the AIG story continue to be you and me, the American taxpayer.

AIG announced Tuesday that it completed a deal wiping out $25 billion of its debt to taxpayers by selling stakes in two subsidiaries to the Federal Reserve Bank of New York.
The troubled insurer gave the New York Fed preferred shares of two of its international life insurance companies, including $16 billion of American International Assurance Co. and $9 billion of American Life Insurance Co. The deal was originally announced in March.

The deal brings the New York-based insurer's debt to the New York Fed down to $17 billion. AIG also still owes the U.S. Treasury $44.8 billion from a separate Troubled Asset Relief Program (TARP) loan, so the insurer still owes taxpayers just under $62 billion.

AIG Chief Executive Bob Benmosche said, in a press release, that the debt reduction "sends a clear message to taxpayers: AIG continues to make good on its commitment to pay the American people back."

What part of paying the American people back are you actually doing here, Bob?  The government is buying AIG subsidiaries at inflated prices and calling the debt square.  It would be like I owed the bank $10,000 and I sold them my toaster and my crockpot, and then they said "Well, now you only owe $4,000!"
Nice work if you can get it.