Tuesday, July 03, 2012
'Government Motors' - Taxpayer Losses On GM Bailout Rise to $35 Billion
The cost of the Obama Administration's bailout of General Motors keeps rising. GM shares fell to a 2012 low of 19.57 yesterday.
If you recall, GM's starting share price in the company's initial public offering (IPO) after the bailout was $33 per share. Most experts estimated that the stock would have to rise to at least $52 and by some estimates as high as $103 in order for the taxpayers to just break even on the large block of shares the government was holding as 'collateral' for the $85 billion bailout.
As it turned out, the IPO was a huge bust and the Obama Administration was forced to dump stock at below market prices, something probably against SEC rules if a private investor did it.
The losses on the stock sale plus the declining price of the 26.5% of GM, or 500 million shares the taxpayers still own adds up to $16.6 billion...not counting the $26.4 billion in direct aid that's never been recouped.
There's also that $45.4 billion dollar tax credit against future profits at the American taxpayer's expense given to them by the Obama Administration that could keep GM tax free for years.GM earned a $7.6 billion 'profit' in 2011 but paid no taxes.
The gifting of GM to President Obama's union allies was simply a transfer of wealth directly from taxpayers to the unions who invested millions in campaign work hours and in contributions to get the president elected, and you can bet that a substantial amount of the taxpayer money spent to keep GM alive will simply be 'recycled' back into campaign funds for President Obama and his fellow Democrats.