Surprise! GM and Chrysler won't be able to pay us back

Justin, please don't get me started on our unconscionably disfunctional domestic auto industry. I can write many thousands of words condemning it. I think that the best I can say is that Detroit needs to be torn down and rebuilt. Really.

If they had allowed GM and Chrysler to fail, then everyone would be screaming about how the administration was responsible for destroying an industry and putting millions of Americans out of work. It was a lose-lose situation. Except the administration made the right call in not making a bad situation into a complete catastrophe. They saw the financial hurricane and flood coming and were able to head it off. Otherwise, the destruction would have been devastating for the country for years to come.

After decades of refinement, our domestic auto industry built the ideal companies to compete in the US in the 1950s. Having achieved perfection in their eyes, they labored mightily to keep it just as it was.

[...] So why have several financial firms been able to repay TARP, but the auto makers can’t? Part of the reason is GM and Chrysler were losing market share before the crisis ensued, whereas financial firms were doing well, Time’s Curious Capitalist blogger Justin Fox says.  [...]

With the U.S. economy struggling, we need policies that will spark immediate business investment and encourage capital investment. We must continue to create overseas opportunities for American companies and chip away at the deficit by taking steps to control wasteful governmental spending. Read and learn about policies that need attention at
http://www.friendsoftheuschamber.com/issues/index.cfm?ID=104 .

I am not surprised at all that the decdadent American Big Business elite screw over America yet again. The American tax payer always seems to be getting the brunt. Who bails out the American middle class family?
While I agree that there are other milesticks for success other then full remimbursement, I think this news will rub sulfuric acid in an otherwise already sore wound. This reminds me about a story I read in the Balenyata, where ancient forms of capitalism ran amok under the guise of "free Markets". The Balenyata focuses on economic injustice, especially where the overwhemling majority of the wealth being shared by a decreasing minority of people. If the Big three auto makers followed the precepts of The Balenyata: that is economic justice, forsight, hard work and egilataranism, then these corporations, much like the rest of Big Business America, would not be in the shape they are in.

This is the best news of the day. Every dollar GM and Chrysler pay back is a dollar removed from the economy -- exactly the opposite of what the stimulus payments are supposed to accomplish.

And despite the frequent (and incorrect) use of the words, "taxpayers' money," not one cent of any payback would go into any taxpayer's pocket. There is zero relationship between deficits and tax rates, which generally have declined in the past 50 years -- despite many large deficits and even a few surpluses. Taxes are political, not financial, decisions.

To answer the question: What was the purpose of the bailout? The purpose was to pump money into the economy and to provide jobs short term and long term. That it did.

So taxpayers, stop grumbling. Less payback means more jobs and more money in our money-starved economy.

Rodger Malcolm Mitchell
rmmadvertising@yahoo.com
http://www.rodgermitchell.com

Everyone is ignoring the 500 lbm gorilla in the room!!!!! the economic and political ramifications from the legal precedent set buy the bankruptcy of GM and Chrysler. In plain words: "If you loan money to a struggling company that has a heavily Unionized workforce, you're contractual rights are secondary to Union members wants."

Now lets enter the dangerous world of LOGIC. As the world becomes even more global, heavily unionized companies are going to find it harder and harder to compete on labor cost, putting them at a disadvantage over the next decade. Not to mention all the restructuring that is going to emerge out of this recession. Put yourself in the shoes of an investor, one of these companies (Ford, Boeing, Delta) is in financial difficulty and is trying to borrow money. Knowing that if this company goes under, depending on the political climate, you're rights of recovery are very ambiguous ...... you will demand a credit card like unsecured interest rate of 15-30% or not buy there bonds at all. In a nutshell, there isn't going to be any reasonable funding from the private market, not even private equity or hedge funds. So what happens then? the government is going to have to step in and do the same thing, force big bank to loan them the money and/or government take over .... if you think this is fantasy, check the history books about what happen in the aftermath of Germany and England taking over car companies.

Read that first sentence: "General Motors and Chrysler probably won't be able to pay back all those loans we've extended them!"

"Them" is business that supplies us with jobs, salaries and the products/services we love to own. "We" is the government that takes our tax money and reliably is crooked and inefficient.

Are "we" really the government? Do GM and Chrysler really owe us money. I looked in my list of assets, and I couldn't find an accounts receivable from GM and Chrysler. And when these companies pay back, will I really receive any of the money?

This whole idea of "them" being business and "we" being the federal government is so outrageously backward, it would be laughable if it weren't so sad.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

[...] Bailout Money Goes to Die - Rick Newman (usnews.com)"Where Bailout Money Goes to Die" Congressional Oversight Panel says taxpayers won't get their money back on General Motors and Chrysl... "Surprise! GM and Chrysler won't be able to pay us back" Nobama and the dems want GM to [...]

[...] Contrast that with our other two American car companies: General Motors and Chrysler probably won’t be able to pay back all those loans we’ve extended them! From the just-released September report of the Congressional Oversight Panel assigned with keeping an eye on the Troubled Asset Relief Program. [...]