GM Repays Loan with Bailout Money

Discussion in 'The Fire For Effect and Totally Politically Incorr' started by Terry_P, Apr 23, 2010.

  1. Terry_P

    Terry_P New Member

    Mar 23, 2008
    I posed a joke titled $100 and a few days later I read this story, beautiful:

    A top Senate Republican on Thursday accused the Obama administration of misleading taxpayers about General Motors' loan repayment, saying the struggling auto giant was only able to repay its bailout money by dipping into a separate pot of bailout money.

    Sen. Chuck Grassley's charge was backed up by the inspector general for the bailout -- also known as the Trouble Asset Relief Program, or TARP. Watchdog Neil Barofsky told Fox News, as well as the Senate Finance Committee, that General Motors used bailout money to pay back the federal government.

    "It appears to be nothing more than an elaborate TARP money shuffle," Grassley, the ranking Republican on the Senate Finance Committee, said in a letter Thursday to Treasury Secretary Timothy Geithner.

    GM announced Wednesday that it had paid back the $8.1 billion in loans it received from the U.S. and Canadian governments. Of that, $6.7 billion went to the U.S. treasury.

    But Grassley said in his letter that a Securities and Exchange Commission form filed by GM showed that $6.7 billion of the tens of billions the company received was sitting in an escrow account and available to be used for repayment. He called on Geithner to provide more information about why the company was allowed to use bailout money to repay bailout money, and how much of the remaining escrow money GM would be allowed to keep.

    "The bottom line seems to be that the TARP loans were 'repaid' with other TARP funds in a Treasury escrow account. The TARP loans were not repaid from money GM is earning selling cars, as GM and the administration have claimed in their speeches, press releases and television commercials," he wrote.

    Vice President Biden on Wednesday called the GM repayment a "huge accomplishment."

    But Barofsky told Fox News that while it's "somewhat good news," there's a big catch.

    "I think the one thing that a lot of people overlook with this is where they got the money to pay back the loan. And it isn't from earnings. ... It's actually from another pool of TARP money that they've already received," he said Wednesday. "I don't think we should exaggerate it too much. Remember that the source of this money is just other TARP money."

    Barofsky told the Senate Finance Committee the same thing Tuesday, and said the main way for the federal government to earn money out of GM would be through "a liquidation of its ownership interest."

    Grassley criticized this scenario in his letter.

    "The taxpayers are still on the hook, and whether TARP funds are ultimately recovered depends entirely on the government's ability to sell GM stock in the future. Treasury has merely exchanged a legal right to repayment for an uncertain hope of sharing in the future growth of GM. A debt-for-equity swap is not a repayment," he wrote.
  2. Trouble 45-70

    Trouble 45-70 New Member

    Why not?

    After all, the Fed has started buying Treasuries with money it doesn't have and just prints.

  3. artabr

    artabr New Member

    Yeah, they paid it back. With their hand in my frickin pocket. :rolleyes:

  4. wpage

    wpage Active Member

    Aug 25, 2009
    Can we send our car payments with monopoly money?
  5. obxned

    obxned Active Member

    Mar 4, 2007
    What else would you expect from Government Motors?
  6. Bobitis

    Bobitis Guest

    "We have repaid our government loans in full — with interest — five years ahead of the original schedule," says Ed Whitacre, chairman and CEO of General Motors Company, asking Americans to give the bankrupt company another look.

    Five years ahead of time? With INTEREST?:eek:

    Who's buyin all those cars? The unemployed?:confused:

    Do they think the people are that stoopid?
  7. Well we keep voting in the same party hacks approved by the political machinery of the Republican and Democratic parties, vetted by the unions and bought and paid for by the corporate lobbyists. So yes we as a nation are that stupid. Who wants to look at balance sheets and listen to political news when we have day time TV and celebrity drunk of the month club getting naked and stupid on film for our entertainment.

    Forgive the pessimism but I have just been in a long discourse about the sensibility of voting mainstream candidates instead of independent 3rd party candidates who may be superior but don't stand a chance in hell of winning so we should all just not vote for them. Makes me owly dealing with stupid.
  8. Lee C.

    Lee C. New Member

    Feb 3, 2010
    Antigo Wi.
    This sounds about as good as obama going after wall street and the big banks ! How in there right mind would go after the people that put him in office. Dose any one really buy this BS.
  9. Everytime I see one of those stupid GM commercials that blab on about how they "repaid" the loan, I do like Iceman from "Top Gun".....*cough cough* BULLS***!
  10. ponycar17

    ponycar17 Active Member

    Feb 17, 2005
    South Carolina
    I was suspicious of this as I've been following the major auto makers' sales to some extent. I didn't understand how they paid back the funds. This makes sense... :mad:
    Last edited: Apr 24, 2010
  11. Eddie N

    Eddie N New Member

    Apr 23, 2009
    Not what I heard on one of the talk shows I listen to. They maybe paid back a fraction.
  12. A handful of lawmakers are accusing General Motors of misleading the public by continuing to claim as part of its advertising blitz that the auto giant has repaid its government loans "in full."

    Even the government "Experts" in this bail out program don't expect that any company that got bail out money to ever pay it all back and that includes GM. The banks maybe but they are in hot water too because they were supposed to use the money to make loans and they haven't made any loans. Instead they just gave back the money they were given in the bail out.

    I still see the GM ad on TV but I wonder how long before they have to make another one saying "Oops, we lied, sorry bout that."
  13. artabr

    artabr New Member

    There's talk about getting the ad banned, claiming and misleading false advertising.

  14. PPK 32

    PPK 32 Active Member

    Apr 15, 2008
    Frickin, Illinois

    Hope no ones sues em, that will cost the taxpayers too. What the heck just add it to the tab.
  15. Eddie N

    Eddie N New Member

    Apr 23, 2009
    I really hate to say this, especially since I like Chevies, but I say that the auto makers should be put out of business, if they took the money. If their products are so good, why were they in such trouble? (Yes, I've heard all the reasons) My point is, the other two should have followed Ford's example. As of now, Ford is the only one that has my respect.
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