New Cars, Old Debts

28Apr2010
Last night I put to bed an issue that's been taking up a lot of my free (read: blogging) time, and am now the proud owner of a PT Cruiser.

No, I wasn't by swayed by General Motor's recent advertisement touting how they paid taxpayers back five years ahead of schedule. The model I bought was an '06, a much coveted "pre-bailout" GM.

Despite the warm fuzzy feeling you're meant to get from that commercial, GM's assertion that it has paid back its loan is about as compelling as "No, really, the cream cleared that rash right up." You still just don't want to go there.

Of course when government and big business collude, you're not getting the full story.

On Apr 21 General Motors made an announcement that it had paid back the remainder of its debt to the government, about $4.7 of the original $6.7 billion in government loans.

But that $6.7 billion dollar loan is small in comparison to the $50 billion dollar total bailout package given to GM. The package leaves the U.S. a 60% equity owner through the TARP program, and gave GM working capital to repay their loan to the government...with money from the government.

Don't you just love accounting?