As Warren Buffett said about the federal rescue of the U.S. credit system, the Fed has gone "all in" to save AIG (AIG). The government has had little choice and will shovel as much as $30 billion more into the pot. AIG announced it had a net loss of $61.7 billion or $22.95 per diluted share compared to a 2007 fourth quarter net loss of $5.3 billion or $2.08 per diluted share.

The insurance company's excuse for the disaster was that "AIG's results in the fourth quarter were negatively affected by continued severe credit market deterioration, particularly in commercial mortgage-backed securities (CMBS), and charges related to ongoing restructuring-related activities."

Keeping AIG in business is probably necessary because it has huge financial transactions with other firms around the world. If these deals had to be reset in the event of an AIG bankruptcy, losses at the company's partners could go into the hundreds of billions of dollars.

The first step in keeping AIG afloat is the government's provision of $30 billion in TARP funds. The other major aspect of the deal is that taxpayers will own large parts of two of AIG's largest businesses. According to The Wall Street Journal, "A key aspect of the plan involves creating trusts to hold two AIG units that sell life insurance overseas: Asia-based American International Assurance Co. and American Life Insurance Co., which operates in 50 countries."

All of the drastic measures by the government clearly signal AIG is "too big to fail." That means if the credit market get worse, the federal government will be back with another load of cash.

Douglas A. McIntyre is an editor at 24/7 Wall St.