Everything you don’t understand about the historic bailout.

So if AIG is going to liquidate its assets anyway, why did the government get involved?

Because the government was scared of what would happen if AIG filed for bankruptcy and was therefore forced to liquidate all of its assets. Some of those assets would be toxic insurance contracts that nobody would want to take ownership of. (The only reason AIG has them is because they’re left over from a pre-subprime-crisis age.) If AIG insurance contracts were left untouched, the insured companies would no longer have insurance. That would open them up to even further economic loss than they’re already feeling. That leads to more bankruptcies. This potential spiral of doom is what has the government so concerned.

Where does the $85 billion come from?

To be clear, all $85 billion may not be spent. The money comes from the Fed’s budget, which comes from the Treasury Department’s budget, which comes from all sorts of fiscal sources, including tax dollars. So technically, tax dollars are at work, but in a very diffused way. The $85 billion bridge loan is just that—a loan. Ironically, those shares are collateral for the loan that will ensure AIG has enough collateral to provide to its clients.

The bailout money isn’t limitless, though. On Wednesday, the U.S. Treasury approved $40 billion of supplemental funding (read: printed $40 billion of new money) to replenish the Fed’s rapidly diminishing coffer. The Fed-aided bailouts of Bear Stearns, Fannie Mae, and Freddie Mac have depleted the Fed’s pool of resources, and AIG draws on it even further. A full purchase of AIG would have been a fiscal stretch—even for the central bank of the United States.

Are there nuances to the 79.9 percent number?