Taxpayers Face Heavy Losses on Auto Bailout

FOXNEWS.com ^ | September 09, 2009 | FOXNEWS.com

[Son House]

The prospect of recovering the government's assistance to GM and Chrysler is heavily dependent on shares of the two companies rising to unprecedented levels, the report said. The government owns 10 percent of Chrysler and 61 percent of GM.

The shares "will have to appreciate sharply" for taxpayers to get their money back, the report said.

Treasury Department officials have acknowledged that most of the $23 billion provided by the Bush administration is likely to be lost. But Meg Reilly, a department spokeswoman, said there is a "reasonably high probability of the return of most or all of the government funding" that was provided to assist GM and Chrysler with their restructurings.

Administration officials have previously said they want to maximize taxpayers' return on the investment but want to dispose of the government's ownership interests as soon as practicable.

Greg Martin, a spokesman for the new GM, said the company is "confident that we will repay our nation's support because we are a company with less debt, a stronger balance sheet, a winning product portfolio and the right size to match today's market realities."

The Congressional Oversight Panel was created as part of the Troubled Asset Relief Program, or TARP. It is designed to provide an additional layer of oversight, beyond the Special Inspector General for the TARP and regular audits by the Government Accountability Office.

The panel's report recommends that the Treasury Department consider placing its auto company holdings into an independent trust, to avoid any "conflicts of interest."

The report also recommends the department perform a legal analysis of its decision to provide TARP funds to GM and Chrysler, their financing arms and many auto parts suppliers. Some critics say the law creating TARP didn't allow for such funding.

[Son House]

Tax cuts would have helped every business across America

[SkyPilot]

We told GW Bush it was a HUGE mistake to cave to the auto unions last December and to start this madness.

Obama made it even worse.

When will people learn that Socialism is a cancer? When Christ returns? What is going to take?

[Son House]

Low tax rates would have also generated more revenue to the IRS

[Enosh]

"... perform a legal analysis of its decision to provide TARP funds to GM and Chrysler..."

Oops.

[bgill]

GM, said the company is "confident that we will repay our nation's support because we are a company with less debt

Yeah, yeah. Sounds like Popeye's J. Wellington Wimpy who was always begging, "I'd gladly pay you Tuesday for a hamburger today." Interestingly, the cartoonist created him from a teacher he had at the Art Institute of Chicago. Things never change in Chicago.

[bmwcyle]

One shot bandaids never work.

[Ghost of Philip Marlowe]

Henry Hazlitt's primary theme in “Economics in One Lesson” is that when the government acts to effect the economy, if you look beyond Stage 1, you'll see a ripple effect of other unintended consequences.

Hazlitt uses the “broken window” analogy. A couple of thugs want to stimulate business for the local glazier, so they throw a rock through the front window of a business shop. They succeed in stimulating that one business. But what they fail to see is that the money that the business owner had set aside for another purpose (to expand, to purchase a suit) has been wasted on purchasing something that has already been purchased. In short, it goes to waste.

OTHER AREAS OF THE ECONOMY ARE HARMED IN PROPORTION TO THE ONE AREA OF THE ECONOMY WAS STIMULATED.

They can count the number of cars that the CFC resulted in. What they can't figure as easily is how the economy on the whole will suffer as a result of that money being drawn from the taxpayer at a time that the taxpayer desperately needs every dime he can get.

[pnh102]

Taxpayers Face Heavy Losses on Auto Bailout

No excrement, Sherlock!

Did anyone really believe that two companies in the toilet financially, companies which were not making any money to even sustain their own existance, could possibly make even more money to pay back these bailouts?

[MeneMeneTekelUpharsin]

This should be good for 60+ on the DOW and 15+ on the Nasdaq.

[Big Giant Head]

Did anyone really believe that two companies in the toilet financially, companies which were not making any money to even sustain their own existance, could possibly make even more money to pay back these bailouts?

When I was in debt with credit cards, it never occurred to me to get a dozen more NEW credit cards to pay off the old ones and also have even more debt limit, as a way to get OUT of debt.

[dools007]

Especially when you take into account the government is going to make them build cars we don’t need and nobody wants.

Bailing GM and Chysler out (Chrysler for the second time) was a negative gimmick that has produced nothing but negative results.

[blueheron2]

The funny part is how low dealer inventory was at GM dealers and Chrysler dealers, especially Chrysler, during the clunker program. Its like having a sale with nothing to sell. Obama didn’t give lead time to the industry so they could supply inventory covered under the program.

So much time, so little experience.

[LibLieSlayer]

Our tax dollars will make the unions rich and powerful again... but the patients will die... patients being GM and Chrysler.

LLS

[Liz]

Taxpayers Face Heavy Losses on Auto Bailout. The Congressional Oversight Panel recommends the Treasury Dept perform a legal analysis for providing TARP funds to (1) GM, (2) Chrysler, (3) their financing arm.

BIGGER QUESTION---WHERE IS THE MONEY?

Ben Bernanke, Hank Paulson, J Ezra Merkin---salivating to divvy up the taxpayers' billions. Americans have not yet learned the full extent of official corruption, thievery, schemes and scams involving $TRILLIONS of tax dollars aided and abetted by the dupes on Capitol Hill.

THE WHIFF OF MADOFF J, Ezra Merkin---ousted head of GMAC (GM financing arm)---got a $6 Billion taxpayer bailout---and was also feeding hundreds of millions to jailed money launderer Bernie Madoff from Merkin's four offshore investment vehicles.

BAILOUT SWILLERS Stephen A. Fineberg's private equity firm---Cerberus Capital Management LP--- also owns Chrysler Motors. The US Treasury bought a $5 billion stake in GMAC (GM financing arm), and lent $1 billion to GM. This latest loan is IN ADDITION to the $13.4 billion the US Treasury lent earlier to Merkin's GMAC, and Fineberg's Chrysler.

SWILLING TIMELINE In 2006, GM sold 51% of Merkin's GMAC to Feinberg's private equity firm Cerberus Capital Management LP (which also owns Chrysler).

HOGGING AT THE PUBLIC TROUGH In May 2004, Feinberg's "private investment group," Cerberus Capital Management, LP became majority owner of IAP Worldwide Services, Inc, one of the US Army’s largest contractors in Iraq. In Afghanistan, Feinberg's IAP runs a drug/addiction center" in Kunduz---Kunduz is the largest opium supplier in the world. BUSY LITTLE BEAVER IAP also provides infrastructure support for the British Ministry of Defence in Kandahar....apart from supporting the US Army in Basra.

BAILED OUT AND STILL SWILLING Stephen A. Feinberg's IAP also serves a broad array of federal clients including the US DOD, NASA, the US Geological Survey, the US Agency for International Development, the IRS, and a variety of other federal agencies.

BACKSTORY GMAC's Merkin and Chrysler's Feinberg paid the Israeli govt $500M to buy Bank Leumi. An “inside” deal not just anybody could get. Bank Leumi looms large in the missing billion dollar taxpayer bailouts since Israel is the only place in the world where an individual can fly-in, got o a bank with a suitcase full of cash, and nobody asks where they got it, or whether taxes were paid on it.

[Liz]

ping

[Froufrou]

Bona fide signage at North Central Ford in San Antonio:

“American owned, not owned by America.”

[Liz]

North Central Ford, San Antonio: “American owned, not owned by America.”..........Hope he sells lots of Fords.

[nascarnation]

I’ve asked my senator Evan Bayh (D, IN) for a picture of the 50 year old UAW retiree I’m supporting at $3200/month pension and silver plated healthcare.

So far, no response.

[Froufrou]

*giggle* The roads are like a sea of F150s!

[RWB Patriot]

Same thing it took in Atlas Shrugged; a complete removal of any way for the looters to escape the consequences of their actions.