AIG's $85 billion bailout package quickly becomes $150 billion. Will it ever end?

Most of us can clearly remember the day – way back in September – when they woke up to hear that they were loaning AIG $85 billion to keep it from failing.  There was a tremendous amount of debate as analysts went back and forth about whether or not this would be good for the American people or not.  Apparently AIG was too big to fail, and apparently that remains true today, but now the terms are a little different and the potential benefit to the American consumer is significantly less than it was before, and if you think that’s bad, keep reading, it gets worse.

So the original terms were pretty good – assuming that AIG could repay – but with very little fanfare the original $85 billion line of credit was supplemented by another $38 billion which was then added to additionally when AIG was allowed to sell another $21 billion of commercial paper to the US Government.  These are big numbers, we’re talking about nearly $150 billion in since September, and some economists are questioning if this will be enough!  But this is where it gets really good…