Govt Motors Scam

[LogikAndReazon]

Thanks taxpayers! GM tallies biggest profit ever- MSN Money

Its up to the American taxpayer to bailout private industry when they fail.....

So they avoid the same risky behavior in the future..........

 

[waltky]

Auto industry bailout still leaves much to be desired - like the payback...

U.S. Taxpayers Still Down $19.1B From Obama's General Motors Bailout
August 21, 2013 -– Only 65 percent of the nearly $80 billion that President Obama unilaterally diverted from the Troubled Asset Relief Program (TARP) to bail out the auto industry over the strong objections of Congress has been recovered, according to the U.S. Treasury Department’s July 2013 (TARP) report to Congress, which was released on Aug. 12th.

When Congress passed legislation creating TARP in October 2008 to stabilize the nation's financial institutions and prevent an economic meltdown, lawmakers intentionally excluded the auto industry from the TARP program. Even former House Majority Leader Rep. Steny Hoyer (D-Md.) admitted to CNSNews.com in March 2009 that he had no idea where Obama got the legal authority to use TARP funds to oversee a restructuring of Chrysler and General Motors, since Congress also voted down a separate plan to bail out the auto industry.

Since 2008, the federal government has recovered more than 95 percent of the $420.6 billion in TARP loans. However, of the $79.7 billion in TARP funds Obama took to bail out Chrysler and General Motors, $21.6 billion is still outstanding. Approximately $19.1 billion of that amount is attributed to GM. GM received more than $50 billion in TARP money after December 2008, when it began its Chapter 11 restructuring. About 80 percent of the TARP funds, or $40.7 billion, “was effectively converted into an initial 60.8% equity stake,” according to the Congressional Research Service (CRS).

As private investment in GM increased and the government sold off stock, the government’s equity stake gradually decreased to 17.7 percent, CRS noted. But the stock market is not cooperating with the pledge the Treasury Department made last December to fully divest itself of 500.1 million shares of GM stock within the next 12 to 15 months. “For the government’s remaining 17.7% of the company to be worth $19.1 billion, the price of GM stock would need to approach $80 per share, between two and three times what the U.S. government has received for any of its previous sales of GM stock,” CRS reported in May. (See CRS - GM.pdf)

However, at mid-day on August 21, GM stock was trading at $34.57 per share, down from its 52-week high of $37.71 and less than half of the $80 per share that would allow the government to recoup its investment. “Whether the government is able to sell the remaining common shares at a sufficient price to recoup the assistance provided to GM is not the sole measure of whether the government shows a gain or loss on the assistance,” the CRS report added. “In assessing the extent to which the government has recovered its investment, economists might also include a number of other factors, such as the cost to the government to borrow the funds that it then provided to GM, a premium to compensate the government for the riskiness of the loans, and the cost to the government of managing the assistance given,” CRS concluded.

- See more at: U.S. Taxpayers Still Down $19.1B From Obama's General Motors Bailout | CNS News