Paclitaxel Albumin-Stabilized Nanoparticle Formulation and Carboplatin in Treating Patients With Stage IIIB, Stage IV, or Recurrent Non-Small Cell Lung Cancer

DISEASE CHARACTERISTICS: * Histologically or cytologically confirmed advanced non-small cell lung cancer (NSCLC) meeting 1 of the following criteria: * Stage IIIB disease with malignant pleural effusion * Stage IV disease * Recurrent disease * Squamous cell histology allowed * Not eligible for curative treatment or treatment with bevacizumab * Measurable disease according to RECIST * Tumor (paraffin blocks or slides) must be available for correlative biomarker studies * No uncontrolled brain metastases (or leptomeningeal disease) * Controlled brain metastases allowed * Able to receive appropriate therapeutic radiotherapy * Able to taper off all steroids without symptoms suggestive of increased intracranial pressure (nausea, vomiting, focal neurologic symptoms) for at least 7 days PATIENT CHARACTERISTICS: * ECOG (Eastern Cooperative Oncology Group) performance status 0-2 * ANC (absolute neutrophil count) ≥ 1.5 x 10\^9/L * Platelets ≥ 100 x 10\^9/L * Hemoglobin ≥ 9.0 g/L * Total bilirubin ≤ 1.5 mg/dL * AST (aspartate aminotransferase) and ALT (alanine aminotransferase) \< 2.5 times upper limit of normal * Creatinine ≤ 1.5 mg/dL OR creatinine clearance \> 50 mg/mL * No known HIV or hepatitis B or C * Not pregnant * Negative pregnancy test * Thrombotic or embolic event within the past 6 months allowed, provided adequately controlled with therapeutic anticoagulation * Hemoptysis allowed, provided it is not life threatening or requires palliative procedures (e.g., endobronchial therapy or radiotherapy) * No cardiac disease, including any of the following: * NYHA (New York Heart Association) class III-IV congestive heart failure * Unstable angina (angina symptoms at rest) * New onset angina (began within the past 3 months) * Myocardial infarction within the past 6 months * No uncontrolled hypertension, defined as systolic blood pressure (BP) \> 150 mm Hg or diastolic BP \> 90 mm Hg despite optimal medical management * No peripheral neuropathy ≥ grade 2 * No active clinically serious infection \> CTCAE grade 2 * No serious non-healing wound, ulcer, or bone fracture * No significant traumatic injury within the past 4 weeks * No evidence or history of bleeding diathesis or coagulopathy * No prior malignancy, except for adequately treated basal cell skin cancer, carcinoma in situ of the cervix, or other cancer for which the patient has been disease-free for 2 years * Stage I (T1c) prostate cancer adequately treated 2 years prior to diagnosis of NSCLC allowed, however metastatic prostate cancer currently receiving hormonal therapy or chemotherapy is not allowed * No significant psychiatric illness, in the opinion of the principal investigator, that would prevent adequate informed consent or render therapy unsafe PRIOR CONCURRENT THERAPY: * See Disease Characteristics * Concurrent therapeutic anticoagulation, \> 325 mg acetylsalicylic acid, or chronic non-steroid anti-inflammatory drug use allowed * At least 14 days since prior and no concurrent radiotherapy * More than 4 weeks since prior major surgery or open biopsy