GM Ponzi Scheme
Here’s a great little piece from Hotair.
The backers of the bailouts to General Motors cried with triumph this week when the automaker announced that they had repaid their bailout loans ahead of schedule. That amounted to proof of the wisdom of government intervention, the argument went, and wondered aloud why bailout critics didn’t acknowledge their errors. Perhaps it’s because the government essentially got paid off with even more government money:
Here’ s how the game goes. GM takes TARP money to balance it’s books. GM has to pay back that money. So it uses another line of credit from the Treasury, to pay the Treasury for the original TARP payments. Sounds like the Goldman case from my other post doesn’t it? Call it what you want, I call it a Ponzi scheme. I’m sure the SEC is looking into that as I write, right?
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.” See, Office of the Special Inspector General for TARP, Quarterly Report to Congress dated April 20, 2010, page 115.
So why are Liberal hell bent on giving these idiots more power and control over the economy and our finances? I’m not sure. I have a few hypothesis. Maybe they think this time will be different? Maybe they think they know better know? I don’t know what it is. It’s Liberal Logic and I’m just baffled by it.
Anyway, great last line from Ed Morrissey:
Instead, we have another good reason for government to refrain from bailing out private companies. It makes them act like government when it comes to transparency about their finances. This claim really does prove that GM now stands for Government Motors.