Wall Street mythologists, and their sycophants at CNBC, are now spinning the yarn that Goldman Sachs ("Goldman") paid back the money it took from taxpayers and thus ought to be free to award enormous bonuses to their senior executives.
That calculation is off by about $30 billion. Goldman still owes me $30 billion (+interest, thank you).
Although Goldman took "only" a measly $10B in TARP money to remain solvent, it magically received 100-cents on the dollar for its defaulting Credit Default Swaps (CDS), 3 trillion cents, to be precise. AIG, itself a Ponzi scheme that even Madoff could not match, with no cash reserves backing the financial products it agreed to insure, served as the conduit for that money to Goldman. Without it, AIG and Goldman would be, as they say in Alaska, belly-up -- i.e., no bonuses, no corporate jets, no office building, nothing, nada, zip, zorch.
The last I knew, you and I had provided AIG with $175 billion. When Goldman pays us its $30 Billion back (+interest), the cost of their chicanery will be reduced to a cool $145 billion in directly outlays, plus the incalculable damage to the economy.
I know, of course, that AIG took our money in order just to "fulfill" its contracts to Goldman and others So what? Our $30B, laundered through AIG, rescued Goldman from oblivion, and now that Goldman is making money hand-over-fist, it should pay us the $30 Billion (+ interest)-- directly, and not re-launder it through AIG.
Does anyone really need to ask "why"? Because if the $30B spends even a nanosecond at AIG, then AIG will probably award itself bonuses out of our money.
To paraphrase some popular jargon, "I know how to spend my money much better than the executives at AIG and Goldman".