Taxpayers Will Get Screwed On Auto Maker Loans

Just Like I said they would

I wrote before that the bailout of the major auto makers was only going to delay the inevitable and that they would eventually file for bankruptcy. I also wrote that when they filed for bankruptcy the bailout money they received would be lost forever because they would not have to pay it back. This was one of my arguments against bailing out any of them. It would appear as if I was right on the money.

GM is filing for bankruptcy and it hopes to sell off part of the company to a company that was owned, for a brief time, by the government. The plan will call for GM to give stakes in the new company to the union and the bondholders.

When a company files for bankruptcy it is supposed to reorganize and figure a way to restructure debt in order to pay creditors. Some of GM’s assets will stay in bankruptcy in order to satisfy any outstanding claims, except those of the US taxpayer. GM will not have to pay back most of the 15.4 BILLION dollars in loans it received from taxpayers because the government will forgive the loans. The US government is awfully generous with OUR money.

In addition, the government would extend a credit line to the new company and forgive the bulk of the $15.4 billion in emergency loans that the U.S. has already provided to GM, the source said. al-Reuters

In addition to forgiving the loans the government will extend a line of credit to GM. How nice, we will let them spend more of our money on credit. How long will it be before that is forgiven as well?

The government is supposed to be good stewards with our money. The taxpayer was forced to hand money over to GM and we should be protected. Those in private industry who invested in GM should take a hit before taxpayers because they had a choice and invested in order to make money. Their gamble did not pay off.

The government had no right to spend OUR money on a private company to begin with. They did so under the guise of it being a loan that would be repaid. Now the government is kissing that money goodbye. We have no chance now of ever getting it back, just as I stated. The Socialist government gave the unions and bondholders a 15.4 BILLION dollar gift because they get part of the company but will not be saddled with the debt the company incurred.

This should disgust everyone. I would like to see all incumbents voted out of office but at the very least every person who voted for the bailouts should be sent packing. People, this is 15.4 BILLION dollars of your money that the government decided to “forgive.” Do you suppose they will forgive your tax bill when it comes due?

As for GM, I will NEVER buy a GM product. I had stated before that I would not buy from a company that received bailout money and I will never buy from one that is owned by the union. I will certainly not buy from any company that raped the US taxpayer. Boycott GM and put them out of business.

Ford did not take bailout money. It pains me that Chrysler did because I own a Jeep and had planned on buying another in a few years (assuming you can still get them after the CAFE and global warming stupidity is added on) but now I will need to find another SUV.

Maybe someone will buy Jeep from Chrysler…

Big Dog

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18 Responses to “Taxpayers Will Get Screwed On Auto Maker Loans”

  1. Darrel says:

    I bought some GM stock at $16. Today it’s $1.27. Oops. That was a boo. It had dropped to $17 before and bounced back up to nearly $40, so I took a chance and lost.

    I hear a Chinese company is interested in buying the Hummer brand. Irony.

    I have 217k miles on my ’98 Honda CRV and it runs like a top (27 mpg). My next vehicle will be a plug in hybrid at least, probably Toyota.

    D.

  2. Big Dog says:

    Darrel, you and I disagree on things but here you clearly indicate you took a chance and lost. Taxpayers had no option. The government loaned our money and will now forgive the loan. We lost without being involved in the process.

    I bought Bank of America at $4.00. I am doing OK with it…

  3. Blake says:

    I have to say, with all the TARP, bailout, and propping up unions, noones stock is doing very well. I have have to dissolve just about all of my stocks, but I did that at 13,000, so I was lucky there—- not many investment ideas out there now.
    I was a chevy owner, but I will never buy another one-

  4. Darrel says:

    DAR
    I can’t complain. I am refinancing 215k with B of A right now at 4.6%. This is going to save me $200 a month, 140k in total and shave 3 years off the loan.

    GM is too much of an American institution to let them go without an attempted life line. I didn’t think it work. The overall loss to the US dwarfs this 15b. What’s that, five weeks in Iraq?

    GM spent more on health care than on steel. It’s hard for the US companies to compete because they have to feed a wasteful, unworkable, bloated, health-care machine.

    D.

    • Blake says:

      Not to mention the bloated hierarchy at the top of the unions, D- for them to go spend the amount of money they did at the Fountainbleau Hotel in Miami, where the cheapest room begins at 400 a night, was a waste of money.
      Now unions, who know nothing about business, are paired with government who does not know business, and if you had an investment in GM, you get nothing, zero, zip, nada, zilch- now things are all peachy aren’t they. Same for Chrysler- it’s a damn shame.
      And yes, D- healthcare is a huge part of it, but I can tell you for sure that if you want to see government in healthcare, go to any VA- My brother needed a liver biopsy, and by the time they got around to him, he was stage 3 cancer- so, no thanx.

  5. Darrel says:

    BLK: “or them to go spend the amount of money they did at the Fountainbleau Hotel in Miami, where the cheapest room begins at 400 a night, was a waste of money.”

    DAR
    Actually, that little rightwing lie was debunked live on FOX news. I watched the clip myself.

    Here is a transcript:

    ***
    Yesterday Cavuto, trying to pitch the angle that the AFL-CIO’s gathering in Miami is a big costly shindig for the wealthy, wound up looking like Elmer Fudd after Bugs has finished him off with a nice little exploding-cigar finale:

    Cavuto: All I’m saying, Stuart, is the mixed message part. Right? You’re at a great locale, I know that hotel very well, I know that beach very well. And I’m just wondering whether the appearance which you guys knocked, rightly so, when the financial guys were tripping over themselves having massages at a lagoon, to say, look, enough is enough, appearance matters, this matters.

    Acuff: Appearance does matter. That’s right, Neil. And that’s why I’m on the program with you today. And that’s why I’m explaining that we got a room rate for less than $200 a room, and that our staying here is the result of negotiations that happened three years ago that promotes an awful lot of good union jobs.

    Cavuto: Wait a minute, wait a minute. The most expensive room is $200?

    Acuff: Excuse me?

    Cavuto: The most expensive room for your members attending is $200?

    Acuff: Under $200.

    Cavuto: Really. [Pause] All right, then everything’s off. You did OK.

    All right — ah. Stuart, seriously. Very good having you. You did a good job.

    Acuff: Thank you so much.

    Cavuto: If I could get one of those deals — that’s not bad!

    http://crooksandliars.com/david-neiwert/anti-union-crap-gets-blown-fox-beck-
    ***

    DAR
    Of course, this didn’t stop the right-wing echo chamber from spreading it all over the place. Beck continued to run with it even after the debunk. He must not watch Cavuto’s show, or he doesn’t care about truth.

    So we can look forward to you making a little adjustment in your mental file on this Blake?

    Good.

    BLK: “but I can tell you for sure that if you want to see government in healthcare, go to any VA”

    DAR
    I lived in Canada for 21 years and I have lived in the US for 21 years. I know what government in health care looks like. Canadians are very proud of their system and I can bury you in reasons why they should be.

    If you would like to tango on this one, let me know. It’s a bit of a specialty of mine.

    D.
    ——————
    “Did you know that Canada ranks above the United States in virtually every measure of health–including outcomes for heart disease, cancer and diabetes? Woldwide, Canada ranks ninth compared to 17th for the United States. To make the issue even more confusing, the US spends 13.7 percent of its gross domestic product on health, while Canada only spends 8.7 percent. And despite spending 13.7 percent of GDP on health care, 15.6 percent of the American population is uninsured.” [and many more under-insured]
    –NWA Times or Demo Gazette, pg. 8D, 7/3/05

    • Blake says:

      You are a specialist in your own mind D- how come Canadians come to the US for care? Perhaps they might be tired of waiting until their cancer gets to stage four?
      As for the Hotel, I have friends in unions, specifically the SEIU, and he told me proudly that they muscled the Fountainbleau’s rate down for their shindig. The rate was still the same, but they got it at a “discount” because of the implied threat of union “action”- how nice.

      • Darrel says:

        BLK: they muscled the Fountainbleau’s rate down>>

        DAR
        So you were just lying when you implied they paid the $400 rate. Got it.

        BLK: [Canadians] might be tired of waiting…>>

        DAR
        Note:

        “In a recent survey, only 3.5 percent of Canadians reported feeling that they waited too long for care – a much smaller number than our 15 percent uninsured, who wait quite a bit. Long waits are a misleading myth.”

        http://www.truthout.org/issues_06/050707HA.shtml

        D.

        • Blake says:

          No D- not lying- 400 is the regular rate people like you and I have to pay if WE want to stay there, and we don’t have a union that wrongfully threatens a work stoppage just to get better rates- that’s dishonest, D- you know that.

  6. Big Dog says:

    Everything seems to be your specialty Darrel. Do you work in health care? Do you know anything about what goes on? Canadians come to the US for care. Did Ted Kennedy go to Canada for his tumor? No, he went to a US hospital.

    The government runs health care here. The military, the VA, and Medicare and none of it is run well and costs too much.

    Also, the numbers are misleading. Many people with the worst diseases come to the US for treatment and more of them die because they were very, very sick. Include illegals who are not in the best of shape and we get socked with their stats. The homeless and the poor as well as the uneducated do not seek care until their diseases are well advanced. There is also a compliance issue (patients not following treatment plans).

    Years ago there was a study that said more people in Baltimore have cancer than surrounding areas. Some genius did not figure that some of the best treatment centers are located in Baltimore so people come from all around to get care.

    Many people from around the world come to America for treatment.

    But let me ask you, are those better outcomes because some people are denied treatment or die waiting and are not counted?

    I have seen people come to the hospital with chest pain and have the cardiac cath that same day. I recently saw a man with a tumor on his back (just discovered) and he had surgery four days later. The reality is, it was scheduled the very next day but another emergency bumped him.

    I have taken care of a lot of people and have never seen anyone turned away and I have never seen anyone not get the care needed.

    I don’t know how many people you have cared for but if you are truly a goat farmer I doubt it was many.

    Why do we spend so much of our GDP on health care? Lawsuits are a major cause. A lot of research money is spent on litigation. When I was in nursing school they said that 19 of every 20 dollars spent in research went to some form of legal issues (licensing the drug or device, lawsuits, legal reviews, permits, etc). Government run health care is expensive and inefficient and the cost adds to the amount of GDP spent. I would also add that America spends more on medical research than anyone else and this adds to the percent of GDP.

    About 40% of the cost of health care is related to litigation and doctors spend a fortune on malpractice insurance not to mention the cost of defensive medicine. The legal profession rapes the medical profession. Tort reform would help as would allowing people to shop in other states. I also know that the required items in insurance plans adds to the cost.

    If insurance companies were required to only provide emergency, wellness, accident, surgical, catastrophic (and I think dental) then the cost would be lower.

    Let us not forget that the demographics between the two countries are different as well and that adds to the different outcomes.

    People could then add what they need in addition to that. If they want OB/GYN or abortion or aroma therapy they can add it. There is no need for a single male to have OB/GYN or abortion services and no one should be forced to pay for aroma therapy unless they want it.

    Think of it as cable TV. Get a basic package and you can add on the others.

    I know a number of ways we could fix the problem but they do not include government run health care. I also know that there is a lot of talk in DC but many of them are on the payroll of lobbyists who work for the health industry, including Obama and his minions. Both parties are in bed and that is one of the reasons we have the mess we do.

    This is an interesting take on Canada.

    • Darrel says:

      BIGD: Everything seems to be your specialty Darrel.>>

      DAR
      Well I do try to stay informed.

      BD: Do you work in health care?>>

      DAR
      No.

      BD: Do you know anything about what goes on?>>

      DAR
      Yes. Quite a bit. Knowing what’s going on is a bit of a specialty of mine.

      BD: Canadians come to the US for care.>>

      DAR
      Some of them do. And Americans go to Canada for care. It’s quite a problem actually. Observe:

      “Interestingly, Ontario recently went through the expense of making everyone get picture ID”s to stem the problem of Americans coming across the border and borrowing health care cards. A few years ago, there were more health care cards in existence in New Brunswick than there were legal residents of the province. It turns out that folks from Maine were going to Canada for care with fake health care cards.”

      http://www.thirdworldtraveler.com/Health/O_Canada_KP.html

      etc.

      BIGD: Did Ted Kennedy go to Canada for his tumor?>>

      DAR
      Why would he? He lives in the US and senators have excellent health care. The US system works quite well for those who are loaded.

      BIGD: The government runs health care here.>>

      DAR
      Well then they should stop letting private for profit companies siphon off trillions of dollars. That’s what other countries have figured out.

      BIGD: The military, the VA, and Medicare and none of it is run well and costs too much.>>

      DAR
      Actually, it is run pretty good, medicare especially, and it costs a hell of a lot less, and wastes a hell of a lot less than the free market free for all we have.

      BIGD: Include illegals who are not in the best of shape and we get socked with their stats.>>

      DAR
      Our stats are bad enough without them. Don’t like illegals? Make them legal. That’s what Reagan did.

      BIGD: The homeless and the poor as well as the uneducated do not seek care until their diseases are well advanced.>>

      DAR
      My point exactly! In our peer countries, they’re covered. So this is not an issue. Ever seen a Canadian ghetto?

      BIGD: Many people from around the world come to America for treatment.>>

      DAR
      And many people from America go all around the world to get top notch treatment at a fraction of the cost. It is actually a huge and growing industry (medical tourism). I have a friend that arranges these trips for a living. I’ll probably do it myself.

      BIGD: But let me ask you, are those better outcomes because some people are denied treatment or die waiting and are not counted?>>

      DAR
      No. That’s absurd.

      Consider:

      “The most comprehensive study that was ever under taken on the two health care systems, the US and Canada’s was done jointly by Harvard University and McMasters University:

      Overall, 14 of the 38 studies showed better outcomes in Canada, while only 5 favored the U.S. The remaining 19 studies showed equivalent or mixed results in the two nations. When the studies were combined statistically, the mortality rate was 5% lower in Canada.”

      –http://www.pnhp.org/news/2007/may/quality_of_healthcar.php

      BIGD: I have seen people come to the hospital with chest pain and have the cardiac cath that same day.>>

      DAR
      The US trauma and emergency care is very good. No doubt this is a necessity since so many people are reduced to using it out of desperation.

      BIGD: I have taken care of a lot of people and have never seen anyone turned away…>>

      DAR
      It’s against the law to turn an emergency situation away. But God help them if they have a chronic illness, no money, and no insurance.

      Would you do me a favor Big Dog? Take a few minutes and watch this clip. It’s quite short, yet amazing to me.

      http://crooksandliars.com/2008/03/03/60-minutes-charity-trying-to-make-up-for-failing-us-health-care-system/

      Is this the best America can do?

      BIGD: Why do we spend so much of our GDP on health care?>>

      DAR
      Short answer: because we have 1,500 insurance companies (last I checked), and Canada has one. And we have a huge bureaucracy beast that eats hundreds of billions of dollars if not trillions.

      One example:

      “New England Journal of Medicine finds that health care bureaucracy cost Americans $294.3 billion in 1999. The $1,059 per capita spent on health care administration was more than three times the $307 per capita in paperwork costs under Canada’s national health insurance system. Cutting U.S. health bureaucracy costs to the Canadian level would have saved $209 billion in 1999.

      The study was carried out by researchers at Harvard Medical School and the Canadian Institute for Health Information,…

      The authors found that bureaucracy accounted for at least 31% of total U.S. health spending in 1999 vs. 16.7% in Canada.”

      ***
      As I’ve mentioned before, the US wastes enough money shuffling paper to pay for Canada’s entire system one and a half times over.

      One more:

      “The total costs to administer claims for Canada’s public system eats up about 1% of all health care expenditures. In the US, Medicare claims administration costs take about 2-2.5% (US pays on a per hospital stay basis rather than lump sum budgeting as in Canada.) Total administrative costs in Canada including hospital administration and physician’s office costs is about 14% of total spending, as compared to about 25% in the US. Some US insurance costs can devour nearly 1/3 of the dollars spend on health care. Because less money is spend on administration in Canada, Canadians actually get more physician and hospital services than Americans.” –Karen Palmer

      –http://fayfreethinkers.com/forums/viewtopic.php?f=1&t=5835

      BIGD: Lawsuits are a major cause. A lot of research money is spent on litigation.>>

      DAR
      I totally agree with you on this. The 95% claim is not right however.

      BIGD: I would also add that America spends more on medical research than anyone else and this adds to the percent of GDP.>>

      DAR
      Per capita? I would have to check. And a lot of that is for designer drugs to make money, not actually save lives.

      I also learned that the US industry spends more on advertising their drugs than they do on R & D. Canada doesn’t have that. No drug ads.

      “Big Pharma Spends More On Advertising Than Research And Development, Study Finds”

      http://www.sciencedaily.com/releases/2008/01/080105140107.htm

      Nearly twice as much on advertising, according to the above study.

      What a waste.

      BIGD: Tort reform would help…>>

      DAR: Agreed.

      BIGD: Let us not forget that the demographics between the two countries are different as well and that adds to the different outcomes.>>

      DAR
      Some. Canada is extremely multicultural. But forget Canada, the US should have a far better system than Canada and at less cost (more people, closer together). But the US, in many categories, and at greater cost, falls behind many other peer countries. Several are better than Canada.

      BIGD: Think of it as cable TV. Get a basic package and you can add on the others.>>

      DAR
      Actually, we get screwed on cable too. I need about two channels at best. Can’t have that. That game is fixed.

      BIGD: I know a number of ways we could fix the problem but they do not include government run health care.>>

      DAR
      Watch the video clip and lets talk. I don’t think the US is ready for single payer. Canada had a big fight over it decades ago and Canadians are pretty reasonable folks. We however are up to our eyeballs in nuts who go to great trouble to keep themselves misinformed about so many things. So that’s not going to work. But a government option should be available. This terrifies the medical industry because they can’t compete with a competitor that isn’t in it for the money. I know it goes against your religion to hear this, but they can’t compete with the efficiencies of a government run system. As I heard on the radio yesterday:

      “I would rather have to deal with a government bean counter who’s job it is to provide me with a medical service I am due, than an industry bean counter who’s job it is to give me as little service as possible in order to maximize profits.”

      BIGD: the health industry, including Obama and his minions.>>

      DAR
      The entrenched interests are well established and wealthy. Obama probably can’t over come them. Americans are profoundly misinformed about the rest of the world, for whatever reason. So we will get another patch job and struggle along until it gets worse. We will do the “slowly grow the government” part of it.

      Metric is smarter too by the way. As a medical person you know this.

      Obama actually sent me an email today. We’re buds. He said this:

      “I have made it clear that real reform must uphold three core principles — it must reduce costs, guarantee choice, and ensure quality care for every American.”

      There’s your target. Knock it down. Sounds pretty evil to me.

      And do watch that video clip. I am interested in what you think about it.

      D.

      • Blake says:

        I tried to watch the clip, but it refused to download- something wrong at one end or the other.
        Barama’s your bud? Perhaps you could convince him to knock off the socialist crud, and grow a pair, take care of this economy the right way, instead of a power grab.

        • Darrel says:

          BLK: “refused to download- something wrong…>>

          DAR
          Thanks for catching that. Here it is on youtube:

          http://www.youtube.com/watch?v=H4kbag-f3K8

          Watch it, see what you think.

          D.

        • Blake says:

          Well, I watched the clip, but my mind is still set- the problem with socialized,or “universal” care, is that one size doesn’t fit all, and govt, has the inevitable tendency to slow the process. While health care needs revamping, the baby doesn’t need to be thrown under the bus along with the bathwater. Private industry has the incentive to do better, if it is not killed by govt. interference. f the govt. uses a heavy hand, we may never have a cure for cancer, or Muscular Distrophy, or many of the diseases that plague us. It is nice that all these splinter groups wish to help, and I am open to innovations in care, but government is not it.

  7. Big Dog says:

    Oh, and your outcomes claims is misleading. Canada does better on some cancers and worse on others. It does better with some cardiac related items but has a higher mortality rate in cardiac arrests.

    • Darrel says:

      BIGD: outcomes claims is misleading.>>

      DAR
      No it isn’t. You didn’t read carefully. The specific categories in which each country does better, is given. I didn’t say Canada does better in all categories.
      And Canada does what it does (better outcomes in more categories), at *much* lower cost.

      And EVERYONE is covered. Do you know what a relief it is to not have to worry about being able to pay bills, or get financially wiped out if you get sick? People in Canada don’t wonder if they can afford to have a baby because of the hospital bills.

      Nobody in Canada worries about whether they can afford to pay the hospital bill if they have a baby. It’s not even a issue. My brother’s wife had a good job at the most successful restaurant in our town of 60,000.

      She had insurance through her job. She had a baby, a C-section. Her insurance company went out of business. My brother and his wife went bankrupt largely because of this. Then they got a divorce.

      My minor child needed a hernia operation last year. Doctor’s in network, surgical clinic is in network, but guess what, this doctor does not work with that clinic. What? In Canada, everybody is “in network.”

      If you would like to get up to speed on this subject you might read this:

      http://www.ourfuture.org/blog-entry/mythbusting-canadian-health-care-part-i#comments

      And:

      http://www.thirdworldtraveler.com/Health/O_Canada_KP.html

      D.

      • Blake says:

        I don’t need to get up to speed by going in reverse, D- when the system isn’t totally trashed, you don’t trash the total system- putting the government in the mix will do just that, if history is any indicator.
        Fix the parts that do not work well, yes- but not everything is in need of repair.