via WTP
On the day following the 221st anniversary of the signing of the U.S. Constitution, WTP Chairman and constitutional activist Robert Schulz today filed a federal lawsuit in United States District Court in Albany seeking to halt the execution of the emergency bailout of American International Group, Inc. (AIG) by the United States Government and the Federal Reserve.
The lawsuit asserts that the commitment of public funds and credit for the direct benefit of privately owned AIG is an ultra vires action by the United States Government and Federal Reserve, i.e., beyond the limited legal authority granted by the Constitution. The lawsuit asks for a “show cause” hearing demanding that the Government produce evidence of its legal authority to commit public funds for such a purpose, as well as emergency and permanent injunctions halting the bailout transaction.
Beyond the Constitutional deficiencies, the bailout establishes a dangerous precedent enabling the Fed and/or Government to nationalize virtually any business or property within the United States without legal authority or congressional approval.
The defendants include the Federal Reserve System, Fed Chairman Ben Bernanki, the U.S. Treasury, Treasury Secretary Hank Paulson Jr. and the United States Government.
The WTP Foundation today issued a press release citing Schulz:
“Beyond the moral hazard and dangerous precedent established by this action, it is of vital importance that the American people recognize that the present financial crisis is a direct and predictable result of decades of constitutional violations by the Federal Government. Through a long-standing policy of disinformation and collusion with the Federal Reserve and Wall Street financial elite, the United States Federal Government has denied public access to information about the secretive operations of the privately owned and operated Federal Reserve and its monopoly control of America’s money system.
“This monopoly control of our currency by a private banking cartel has resulted in increasing distortion, volatility and cyclical (boom and bust) economic conditions in the U.S. and abroad. America’s fiat currency (produced from thin air) is manipulated by the Federal Reserve for the benefit of its owners, major Wall Street financial institutions and the Federal Government and is not unaccountable to the taxpayers. These abuses of the Constitution have taken our financial system to edge of the abyss. The chickens have come home to roost.”
Click here to read the Complaint, the Memorandum of Law supporting the TRO, and Schulz’s Declaration which includes several recent articles from the New York Times.
STREET KNOWLEDGE 
I would like to see how this turns out especially considering that if some of these bail outs (not all, just some) are not done then we all will find ourselves in deep do-do.
I am not sure about AIG failing would cause a world wide market crash (no more than Lehman would have) but I have to admit that AIG is an insurance agency and it was insuring, amongst other things, those bad derivative sub prime loans.
In a normal market I would let it go, but the shock that AIG would have on the market and those loans not being insured anymore by anyone (not to mention the average guy who has insurance with the company) could conceivably cause a major problem within the markets.
The worst may be over, but its not over. If another major bank fails or some major insurance company goes, that could be it.
BTW
If it does turn out unconstitutional, a way around it would be an admentment (of which I think would go through quickly) or a law put on the books.
Bottom line, if the US government didn’t do anything, all of us, not just these businesses and the drama they created, would be in trouble. I don’t like it one bit, but doing nothing leads to another 1929 crash.