I guess I don't follow how the government used AIG's assets for it's own purposes. AIG owed money to other people (specifically Goldman), and when they got the

I guess I don't follow how the government used AIG's assets for it's own purposes. AIG owed money to other people (specifically Goldman), and when they got the bailout money were instructed to do what real businesses do (pay their debts). Receiving a bailout sounds like reasonable grounds for not defaulting on obligations. AIG had 2 options, the first was to take the bailout money and pay back their debts, and the second was to go into bankruptcy. There wasn't a third option where they got to decide not to pay back what they owed, and instead just kept all the bailout money for themselves.