Im sitting here thinking about the costs of relief operation the size of the one now underway in the Philippines. While Im sweating that, theres talk about the next big bullet that the taxpayers are bracing for. No, its not another Obamacare post. Relax. Remember when we bailed out General Motors and Chrysler, to save all those jobs and the auto industry? Well, incredibly, the guys who engineered this deal never even figured on getting all their money back. Apparently, the U.S. government has decided to sell off the rest of its shares in GM by years end. This, to bring an end to a pimple on the century plus butt of the automotive industry in America. According to the Treasury Department, We the People still own over 31 million (thats MILLION with an M) shares of GM stock. The idea is to sell off the stock as long as the price stays up. Shares of GM briefly hit $39 in trading early Thursday. They pulled back a bit by midday, but still were up 76 cents, or 2 percent, to $38.45. The shares have gained 34 percent this year. The government received 912 million shares in exchange for a $49.5 billion bailout during the financial crisis in 2008 and 2009. So far it has recovered $38.4 billion of the money, but selling the remaining shares at Wednesdays $37.69 closing price gets the government $1.17 billion, leaving taxpayers short by roughly $10 billion. Were going to lose $10 BILLION dollars. And heres the kicker; Since emerging from that 2009 bankruptcy, GM has shown profits for 15 quarters in a row. GM stacked up almost $20 billion in net income on the strength of its products and enjoyed rising sales in North America and China. GM also took some of that money (and jobs) overseas (Brazil) while investing $8.8 billion in U.S. facilities. Granted, this did allow them to add about 3,000 workers, bringing U.S. employment to 80,000. While the taxpayers are now sweating a $10 BILLION dollar loss, GM is laughing all the way to the bank, sitting on $26.8 billion in cash and even considering restoration of a dividend. Did you know that GM hasnt paid U.S. federal income taxes (at all) since leaving that bankruptcy due to the write-offs from accumulated net losses? But the jugheads in Washington never really thought about guarantees to insure the taxpayers were actually repaid. Once again, corporations prosper while the taxpayer bends over and grabs his/her ankles. Oy.
Posted on: Fri, 22 Nov 2013 05:42:24 +0000