The Federal Reserve’s $85 billion loan to keep American International Group Inc. (AIG) above water could trigger solutions to the nation’s economic problems, says the chief economist for the Real Estate Center at Texas A&M University.
“The good news is that the government is starting to reveal the magnitude of the problems in the financial system, which are massive,” said Dr. Mark Dotzour. “The public no longer believes that there are no problems. Now we will get the political will to start coming up with solutions. Like I’ve been saying for 14 months, expect the unexpected and expect the unprecedented.”
The Fed announced its plans Tuesday to seize AIG. The deal, which will give the government a 79.9 percent stake in one of the world’s largest insurers, is the Fed’s most far-reaching intervention into the private sector ever.

Source: Real Estate Center