GM LIES ON REPAYMENT OF BAILOUT MONEY
Alert! GM lies in new ad on its repayment of bailout money
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The ads are running at least once per hour on all of the major network, cable, and satellite TV outlets. General Motors claims it has repaid its bailout from the taxpayers in full.
Only one big problem stands in the way of this grand announcement being taken seriously. It is simply not true.
Through a deft sleight of hand technique, the automaker used taxpayer bailout funds it had stored in a separate account to repay its loan from the taxpayers. Simply put, GM used bailout money to pay back bailout money, and then claimed it had 'repaid its loan from the federal government.'
(AP Photo/Paul Sancya, File). 
When the ad first began running it was obvious to those who had followed the news concerning GM that something was amiss. General Motors still has not turned a profit. Sales are still in decline compared to other automakers such as Ford, Honda, and even the beleaguered Toyota.
Thus, the ad begged the question, how on earth did GM, which is still reeling from massive losses, repay in full all of its taxpayer funded loans?
We now know the answer. It didn't.
The fact that the company tucked away part of the tax money in a separate fund in no way changes the fact that this money is bailout money too.
Let's say, for example, citizen A loaned citizen B $1000 dollars. Citizen B then put $500 dollars in a separate account and used only half the money he had been loaned. Then, let's say that citizen B wished to repay the loan to citizen A by giving him the $500 bucks out of the separate account, and then claimed he had 'repaid his loan in full.'
Not so fast. Citizen B still owes citizen A the other $500 bucks.
This is what GM has done. And some in Washington are crying foul.
The Inspector-General for the bailout, TARP watchdog Neil Barofsky, told the Senate Finance Committee that GM had used bailout money to pay back the federal government. And the ranking Republican on the committee, Senator Chuck Grassley, stated that,
"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.
Thus, the stark, open corruption of this government and everything it touches is once again on full display.
The bottom line? Who in their right mind would purchase a car from a company that can't even tell the truth about its loans from the American taxpayers?
And who in their right mind would actually believe a single word out of the mouths of the government crooks who are now touting the GM ploy as 'proof' that the bailout plan worked?
For commentary on the issues of the day, visit my blog at The Liberty Sphere.
posted by Hairpinandarrow_blog at
7:36 AM
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