GM paying back its government debt

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GM paying back its government debt

Postby Dianora » Fri Apr 23, 2010 1:34 pm

So New GM chairman proudly proclaimed that they've repaid every last penny of the government TARP debt 5 years ahead of schedule video. Never mind the other 52 Billion dollars of over priced New GM equity that US Treasury still holds that makes up 62% of GM. Even this little so-call repayment is off.

During his testimony [Inspector General for TARP Neil] Barofsky addressed GM’s recent debt repayment activity, and stated that the funds GM is using to repay its TARP debt are not coming from GM earnings. Instead, GM seems to be using TARP funds from an escrow account at Treasury to make the debt repayments. The most recent quarterly report from the Office of the Special Inspector General for TARP says "The source of funds for these quarterly [debt] payments will be other TARP funds currently held in an escrow account."...

Therefore, it is unclear how GM and the Administration could have accurately announced yesterday that GM repaid its TARP loans in any meaningful way. In reality, it looks like GM merely used one source of TARP funds to repay another. The taxpayers are still on the hook...

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. When these criticisms were put to GM’s Vice Chairman Stephen Girsky in a television interview yesterday, he admitted that the criticisms were valid:

Question: Are you just paying the government back with government money?

Mr. Girsky: Well listen, that is in effect true, but a year ago nobody thought we’d be able to pay this back.


So they're using a different TARP fund to pay back the initial TARP debt. This is like saying I paid off my Bank of America Visa by using my Bank of America Mastercard and touting my own financial genius.
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Re: GM paying back its government debt

Postby Aubade » Fri Apr 23, 2010 1:35 pm

I love government money.
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Re: GM paying back its government debt

Postby Arcand » Fri Apr 23, 2010 2:55 pm

I liked how, right after being hauled to their feet by gazillions of taxpayer dollars, they ran a series of billboards that said "May the Best Car Win".
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Re: GM paying back its government debt

Postby Amarant_Pally » Fri Apr 23, 2010 11:02 pm

Arcand wrote:I liked how, right after being hauled to their feet by gazillions of taxpayer dollars, they ran a series of billboards that said "May the Best Car Win".


Well, the optimist in me wishes that that incident would have gotten them up off their asses and started to actually sell "good" cars (ie. actual improvements after years of research, instead of "slightly safer/fuel efficient" models over previous years).

The pessimist in me, however, realizes that fuel combustion systems can only really go so far.
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Re: GM paying back its government debt

Postby Macktruck » Sat Apr 24, 2010 6:01 am

Aubade wrote:I love government money.


but government cheese is so much tastier.
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Re: GM paying back its government debt

Postby Invisusira » Sat Apr 24, 2010 6:15 am

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Re: GM paying back its government debt

Postby isiz » Sun Apr 25, 2010 2:43 pm

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Re: GM paying back its government debt

Postby Erendis » Mon Apr 26, 2010 7:04 pm

The sad thing is that 99% of Americans will see the headlines "GM pays back Government Loan" assume everything is OK and never question the shady finance that is going on.

I'm convinced that most people in Congress don't know or care about what is actually going on.

The problem I have is this is still the country with the least oppressive government so I can't go anywhere that is better. ><
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Re: GM paying back its government debt

Postby Levantine » Tue Apr 27, 2010 5:24 am

Erendis wrote:The problem I have is this is still the country with the least oppressive government so I can't go anywhere that is better. ><


I lol'd. 10/10
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Re: GM paying back its government debt

Postby Dianora » Sun May 02, 2010 12:18 pm

Nick Gillespie of Reason Magazine explained it better in this video than I did.
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Re: GM paying back its government debt

Postby thegreatheed » Sun May 02, 2010 12:38 pm

Erendis wrote:
I'm convinced that most people in Congress don't know or care about what is actually going on.


Most people in Congress know exactly what is going on. The ruling powers support and encourage this insincerity.

Obama explained the agenda before the election but you had to put 2 and 2 together for yourself, because the media certainly wasn't going to. If you look at his roots, and who HE CLAIMS are the fundamental figures in his childhood, he has a very marxist, socialist background. The problem is no one in the media bothered to report on his background, his schooling, his family friends, even his church. Then he ran his campaign on "change and hope" and "fundamental transformation of America". Great slogans, he's a great speaker, and a great teleprompt reader. That combination makes for inspiring snippets and perfect campaign material.

1. Congress isn't stupid. They may be disingenuous and crooked, but they aren't stupid.
2. The media isn't stupid. See above.

They both know exactly what is going on here.
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Re: GM paying back its government debt

Postby Fridmarr » Sun May 02, 2010 1:05 pm

Heh, I finally heard GM's radio commercial Friday, hilarious.
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Re: GM paying back its government debt

Postby thegreatheed » Wed May 05, 2010 2:36 pm

So, part of the financial regulatory reform act will place a confiscatory tax on all banking institutions that have over 50 billion in assets and were were eligible for TARP funds, REGARDLESS IF THEY ACTUALLY TOOK ANY FUNDS. Here's another big business money grab by this administration, disguised as compensation for TARP funds (even though many banks have fully repaid their loans, and other banks who will be taxed never took any loan money). No, GM and Chrysler won't have to pay this tax. Even though they HAVEN'T paid back their full TARP loans, but what do you expect, our government owns majority shares in them.

That sounds like an amazing way to help the financial sector recover from an almost global meltdown, MOAR TAXES.
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Re: GM paying back its government debt

Postby Arcand » Wed May 05, 2010 2:56 pm

thegreatheed wrote:No, GM and Chrysler won't have to pay this tax. Even though they HAVEN'T paid back their full TARP loans, but what do you expect, our government owns majority shares in them.


It sounds like you heard about this tax on banking institutions, and then were outraged to learn that it wouldn't fall on GM and Chrysler.

If that's not the case, I'm not sure why these two rants are expressed as one continuous idea.
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Re: GM paying back its government debt

Postby fuzzygeek » Wed May 05, 2010 3:54 pm

Arcand wrote:
thegreatheed wrote:No, GM and Chrysler won't have to pay this tax. Even though they HAVEN'T paid back their full TARP loans, but what do you expect, our government owns majority shares in them.


It sounds like you heard about this tax on banking institutions, and then were outraged to learn that it wouldn't fall on GM and Chrysler.

If that's not the case, I'm not sure why these two rants are expressed as one continuous idea.


I've not looked into the details, but:

GMAC is a global financial services company that was founded in 1919. Initially formed to provide automotive finance products and services to General Motors dealers and clients, GMAC has since expanded its business to include mortgage operations, insurance, commercial finance and online banking.

...

Dec. 24, 2008 was a key turning point in GMAC's history when it was approved as a bank holding company by the Federal Reserve Board under the Bank Holding Company Act.

Another defining moment for the company was when GMAC entered into an agreement with Chrysler in April 2009 to provide auto finance products and services to Chrysler dealers and customers. This allowed GMAC to leverage its core strength of auto financing and become part of a solution with the U.S. government to restructure the auto industry.


http://www.gmacfs.com/us/en/about/who/index.html

GM is a banking institution as well.
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