$200 billion? Try $1.6 trillion (or more) in outstanding liabilities. If AIG goes belly-up, there's going to be more than a foot wound - the sound we'll all hear is that of a sucking chest wound.
You're point is very well made.
I should have been more specific. The $200 billion was in reference to the essentially unsecured TARP money. The policyholder liabilities are protected by the various state regulations and are deemed safe. It is that fact that keeps it out of bounds from Fed seizure in the event of bankruptcy. In short the policyholders are protected and the taxpayers are screwed. I guess that would make the policyholders the next public enemy #1.