"There is an interesting opportunity that I believe our Congress missed.
As mentioned below the core issue is the CDS obligations. Ideally AIG
would have been able to simply "return" the CDS fees they received and
cancelled the insurance. Instead, we propped up AIG with $100B+...AIG
made good on their CDS obligations and paid the billions to Goldman,
etc. (who then proceeded to pay those billions in bonuses -- far more
than what AIG allegedly paid out).

A potentially better approach would have been to create a corporate
excise tax (like the bonus tax being proposed) on all proceeds from CDS.
Make the tax so onerous that if AIG then simultaneously offered to allow
the cancellation of a CDS obligation in return for a refund of fees..the
cancellation of the CDS instrument would be better financially for both
parties. Such a move would effectively cancel out the CDS market as it
stands today. Furthermore it would stop the cycle of funneling money
into AIG simply to reward the folks that betted in the casino. As a
reminder it is the CDS market that is described as a >$50trillion
outstanding liability hanging over all our heads so cancelling this out
is a requirement to eliminate the opaque risk present in the system.

Sadly - this would have been very valuable to do in November. I do not
know how much more AIG will payout on CDS's....it would be nice to know
if Congress is even tracking that."

(A correspondent)