Can I pay my taxes with a student loan?
October 31, 2008 12:31 PM   Subscribe

After an historic near-collapse (p), a federal bailout to the tune of $85,000,000,000, a second federal bailout to the tune of $37,800,000,000 and one hell of a party (p), the news on A.I.G. just keeps getting better. Now: Fed arbitrage! Paying down a 9% taxpayer loan with a 2% taxpayer loan? Genius!
posted by jckll (7 comments total) 2 users marked this as a favorite
Isn't this the dilemma of trying to use interest rates as punishment?
posted by smackfu at 12:49 PM on October 31, 2008

Seems like a perfectly rational thing to do, no? And the rate on loan they paid down is 8.5% over Libor, which would currently effectively be around 11%.
posted by preparat at 1:00 PM on October 31, 2008

Sure it seems rational on the part of A.I.G., but what about the Fed/Treasury? Did they not anticipate this? Why not exclude A.I.G. from the CP buying program? Or at least put strict terms on the use of Federal funds? Allowing them to participate effectively nullifies the punitive intention of the original bridge loan...
posted by jckll at 1:09 PM on October 31, 2008

Not cool.
posted by snofoam at 1:29 PM on October 31, 2008

Semi-related, the District of Columbia is suing Bank of America for $105 million [that number looks so small now] for taking part in a scam lead by an employee of the DC Tax and Revenue office.
posted by exogenous at 3:03 PM on October 31, 2008

I'm missing the "why didn't they do this or that" part of your post. or is this just another "get of my lawn" FPP?
posted by krautland at 3:26 PM on October 31, 2008

what is the 'money link' plz
posted by fingerbang at 12:28 AM on November 1, 2008

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