Government Sells Off GM Shares . . . Public Takes $10.5 Billion Bath

150px-General_Motors.svgThe federal government just cashed out on our General Motors shares and the final tally is a $10.5 billion loss. Many could still argue that this cost was worth it, but it is different from what has been represented to the public that we would lose no money on the deal. Indeed, the article below says that the White House delayed the final sale until after the election due to the implications of an over $10 billion bath. My concern is the lack of clarity and honesty surrounding the bailout. The public might still have supported the plan but it was not sold as an over $10 billion walkaway bailout.

U.S. Treasury Secretary Jack Lew confirmed that a $10.5 billion loss on the $49.5 billion bailout.

Notably, Treasury sold its stake in Chrysler Group LLC in July 2011 with a $1.3 billion loss on a $12.5 billion bailout. That is a total of $11.8 billion loss on these two companies.

Notably, the Administration decided not to require GM to repay its entire bailout and swapped the loans for the 60.8 percent ownership. It then bailed on its shares before recouping its losses after pushing the sale past the election. In hindsight, the decision to take shares instead of repayment looks like a politically useful way to forgiving debt while leaving the appearance of a public “investment” in the company.

Source: Detroit News

53 thoughts on “Government Sells Off GM Shares . . . Public Takes $10.5 Billion Bath”

  1. Reblogged this on SiriusCoffee and commented:
    The headline should read, “1 Million GM Workers Rob U.S. Taxpayers $11 Thousand Each”. You could argue that it’s money that would have been lost anyway, had the bail-out not happened, or more legitimately, GM should should have been forced to buy back the debt and pay back the taxpayers.

    1. “The headline should read, “1 Million GM Workers Rob U.S. Taxpayers $11 Thousand Each”.”

      So its the workers that did this and management and our political leaders were victims in this event?

  2. Blouise: Some people don’t understand that Harry Reid doesn’t let proposed bills written in the House of Representatives come to a vote in the Senate. He alone prevents bills from passing.

  3. “Great perspective Elaine. Protecting millions of jobs cost alot less than propping up banksters.” Two wrongs make a right?

  4. obama isnt claiming anything from tax cheats of the screwillionaires club.. he is collecting it from the little people as they call us.. remember elona helmselys famous quote..

    ” on the little people pay taxes…

    the corporation just gave the willets point developers 104 million in tax breaks…

    madison square garden went from 10 to 22 million in tax breaks.

    need i say anything more?

    its time for people to stop praising obama he hasnt and isnt going to do ish to help the people. his hybrid masters would kill him before allowing it.. besides his scandal is getting ready to hit and hit big…

    the only reason madoff is in jail is because he pissed off those at the top and stole from those at the top of their screw chain otherwise we would have never heard his name…

    rupert murdock isnt in jail nor is donald frump and they both committed hugh ponzi scams and worse crimes. but always against those not in the league. they accepted their public warnings straightened up and kept it moving….. in case anyone forgot ruperts news comapnies were caught hacking into computers, cell phones and landlines…. along with a few other things

  5. Why is the Govt. selling its shares now?

    Because the GM CEO et al. could not hike their salaries / Bonus payments as long as the Govt. is a major partner.


    Make the Govt. sell its share, preferably with a loss, so they can hit the sky and enjoy the reaches windfall that we-the-people handed out.

  6. Darren, SCOTUS would be a problem in your dystopian fantasy, but no problem with Obama. It’s clear the Republicans would deal with him easily.

    After all, iImpeachment is their preferred way to deal with Democratic presidents.

  7. I wonder what would happen if President Obama’s and the SCOTUS’ ratings somehow fell to that which Congress has earned? Other places and times around the world it meant the gov’t there had to pack their bags.

    Maybe Hollywood and other forms of entertainment and distraction provide the breads and circuses to keep things from getting ugly here.

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