The Truth About the GM Bailout

Discussion in 'Politics' started by WillowTree, Jun 13, 2011.

  1. WillowTree
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    WillowTree Diamond Member

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    With Chrysler and GM announcing they have repaid their government loans, it did not take long for Democrats to crow that the federal auto bailouts were a clear success. Indeed, the president and his supporters hope to make political hay from these efforts for the 2012 elections.

    Never mind that the bailouts were a use of taxpayer dollars not even within the initial scope of the constitutionally questionable TARP. Never mind that taxpayers are still a major shareholder in GM. And never mind that these bailouts have ingrained a “too big to fail” strategy among American businesses, who now feel entitled to federal funding should they fall short in the marketplace.

    In reality, GM’s claim about paying back bailout money is misleading. Much of the $50 billion in federal assistance came in the form of equity purchases, with the government taking a 61-percent stake in the company. The cash loan totaled “only” $6.7 billion in taxpayer dollars. For taxpayers to recoup their investment, the federal government would have to sell its 365 million shares at a profit. The break-even price would be $55 a share, but GM is currently selling at $28.90.

    And it doesn’t look like share prices are increasing any time soon. The stock market is up since mid-November by about 8 percent. But the stock of General Motors has bucked the trend. It’s down more than 16 percent since its initial public offering on November 18, 2010.


    Read more: The Truth About the GM Bailout - FoxNews.com
     
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  2. CrusaderFrank
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    CrusaderFrank Diamond Member

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    These are the same people telling us not to worry about Medicare and Social Security because they're financially sound.
     
  3. CrusaderFrank
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    CrusaderFrank Diamond Member

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    See profits are evil and no Progressives want to be evil so these losses are good.
     
  4. Avatar4321
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    Avatar4321 Diamond Member Gold Supporting Member

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    Scary isn't it?
     
  5. mmmjvpssm
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    mmmjvpssm Member

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    “George W. Bush yesterday handed the fate of US car makers to president-elect Barack Obama as he announced plans to lend General Motors and Chrysler $17.4bn to survive the next three months.” an article in the Financial Times gives us an insight into the recently announced bailout plan for the US car makers GM and Chrysler.
    Bush bails out GM and Chrysler | Global Crisis News
     
  6. Trajan
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    Trajan conscientia mille testes

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    here ya go, the Wapo itself...

    “Chrysler has repaid every dime and more of what it owes American taxpayers for their support during my presidency.”

    — President Obama, June 4, 2011

    uhm no don't think so.

    President Obama’s phony accounting on the auto industry bailout
    By Glenn Kessler

    The Pinocchio Test

    snip-
    The president is straining too hard. If the auto industry bailout is really a success, there should be no need to resort to trumped-up rhetoric and phony accounting to make your case. Let the facts speak for themselves

    President Obama’s phony accounting on the auto industry bailout - The Fact Checker - The Washington Post
     

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