This whole AIG bonus scandal is simply ridiculous. The government gave away over $150 billion to a company on the verge of collapse and failed to attach any conditions. If we really didn't want them to pay bonuses or spend the money on anything they pleased, we should have said so up front. Some members of Congress actually had language included in the original bill that would have precluded such payments, but it was removed at the behest of the Treasury Secretary. His argument for removing it was that if the Government regulated too heavily companies might not accept the funds and the program would have little impact on the economy. I guess Congress decided they should not have to be bothered with actually thinking things through when they make a law.
The really insane part of this is that Congress continues to ask for the money back (or they say they will tax the heck out of it)- whatever happened to stimulating the economy? It seems to me that the best way not to stimulate the economy is take people's excess income away. Not to mention, it is a terrifying precedent for Congress to set by taxing individual citizens. Just wait, soon they will come after your bonus or lottery winnings (as if the tax on that isn't insult enough)! Don't worry, this whole thing gets even better - not only did Congress fail to act to prevent such payments, but they act as if AIG deliberately used taxpayer money to pay bonuses. When in fact, the contracts that dictated these payments were entered into between AIG and its employees in 2007, well before AIG had received any taxpayer money. Now let us consider carefully what Congress is really saying by asking for this money back. They are saying that by receiving funds from the U.S. Government, AIG should be allowed to not pay bonuses they are contractually obligated to pay. Basically they are reversing the bedrock principle upon which our economy and society runs - the enforceability of contracts! I don't know about you, but I would think twice before entering into any kind of contract with AIG after this (I kind of doubt that is going to help stabilize the company).
Last, but not least (and this is really the kicker), why is this occupying so much of our leaders' time when the economy is still falling apart? I'll tell you why - misdirection. They have no idea how to fix the economy, or rather they don't want to do what needs to be done (more on that later), so they figure it is easier just to get people to focus on something else. The really scary part is how well this actually worked! I mean seriously they paid ~$150 million in bonuses that is less than 1% (0.1% actually) of the $150 billion they received in actual cash. This was really worth the time of all those senators and congressmen?
It's time to face the facts we cannot rush to throw around billions of dollars with little to no prep time, conditions, or constraints and then get all mad when the money is spent in ways we don't approve. (This is why 401 (k)s, IRAs, 529s, etc. have rules on what you can use the money for and still get the tax advantage.) If our goal is actually to stimulate our economy, as opposed to socialize it (think hard about that one), then we should have let those people keep their bonuses and go buy cars, boats, jewelry, or whatever else they pleased. If that is our goal the one thing we should never do is give companies like AIG an excuse to break contracts.
That's my two cents.
Last, but not least (and this is really the kicker), why is this occupying so much of our leaders' time when the economy is still falling apart? I'll tell you why - misdirection. They have no idea how to fix the economy, or rather they don't want to do what needs to be done (more on that later), so they figure it is easier just to get people to focus on something else. The really scary part is how well this actually worked! I mean seriously they paid ~$150 million in bonuses that is less than 1% (0.1% actually) of the $150 billion they received in actual cash. This was really worth the time of all those senators and congressmen?
It's time to face the facts we cannot rush to throw around billions of dollars with little to no prep time, conditions, or constraints and then get all mad when the money is spent in ways we don't approve. (This is why 401 (k)s, IRAs, 529s, etc. have rules on what you can use the money for and still get the tax advantage.) If our goal is actually to stimulate our economy, as opposed to socialize it (think hard about that one), then we should have let those people keep their bonuses and go buy cars, boats, jewelry, or whatever else they pleased. If that is our goal the one thing we should never do is give companies like AIG an excuse to break contracts.
That's my two cents.
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