Take the 2-minute tour ×
History Stack Exchange is a question and answer site for historians and history buffs. It's 100% free, no registration required.

Has a country ever used an insurance company as a shield when the economy goes down?

I know that insurance companies have tons of money beforehand.

share|improve this question

closed as not a real question by Joe, American Luke, Tom Au, Russell, Steven Drennon Aug 28 '12 at 14:10

It's difficult to tell what is being asked here. This question is ambiguous, vague, incomplete, overly broad, or rhetorical and cannot be reasonably answered in its current form. For help clarifying this question so that it can be reopened, visit the help center.If this question can be reworded to fit the rules in the help center, please edit the question.

2  
Insurance against what? –  choster Aug 10 '12 at 14:00
    
If you would like to edit this to make it a more complete question, I will be happy to consider reopening it. –  Steven Drennon Aug 28 '12 at 14:10
add comment

1 Answer 1

up vote 4 down vote accepted

The net assets of even the world's largest insurance companies aren't anywhere near the amount of money a large Economy like the USA or the EU loses during a recession.

For example AIG is said to have total net assets of a bit less than $200 billion. That's how much you could theoretically get by sucking the company completely dry and abandoning it (leaving all its other insurees high and dry).

However, USA tax receipts dropped more than $400 billion in just the first year of the recession (2009). They still haven't gotten back up to 2008 levels (although they should this year, or in 2013 in "real" dollars). This isn't even taking into account tax revenue drops for the 50 states, extra expenditures on unemployment benifits, medicaid, the stimulus commonly accepted as nessecary to get an enonomy out of recession, etc. Add all that up and you are easily into trillions.

There is just no comparison between the amount of money represented by an entire nation's economy and the resources a meer company operating in it can muster.

share|improve this answer
add comment

Not the answer you're looking for? Browse other questions tagged or ask your own question.