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Thread: US Lost Ten Billion Dollars on GM Bailout

  1. #51
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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by PeteEU View Post
    And you dont seem to understand that this does not happen overnight. In the mean time hundreds of thousands if not millions of people would be thrown into unemployment and effect of such a major event would cost far more than 11 billion dollars.
    Actually, most of that would happen pretty quickly. Companies go bankrupt all the time and we see these transitions dozens of times each year. GM would have been one of the bigger transitions but the process wouldn't have been much different. The ones who would get screwed would have been the pension beneficiaries. The pension plan would go to PBGC and benefits would get slashed but that would be nothing like an $11B hit.

    The flip side is that the salvaged parts of the business would be set up to run without many of the encumbrances GM was subject to and thus would be able to produce at higher rates which would offset a lot of (if not all) the negative economic impact.

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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by Ikari View Post
    I wonder how much we lost to all the banks and wallstreet.
    Beats me. I'd like to see a study of that.
    "It's always reassuring to find you've made the right enemies." -- William J. Donovan

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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by ttwtt78640 View Post
    You again, show lack of understanding of the US gov't. We choose the gov't, at least on paper, it is time for the sheeple to choose more wisely, IMHO.
    WE dont, others do. I sure wasnt consulted about social spending.

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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by Threegoofs View Post
    That's an odd way to put it....but yes. That's an estimate from S&P, and probably an underestimate. We basically gave thousands of government workers a paid vacation while disrupting lots of ongoing projects. That's $2B right there. I know scientists who had ongoing experiments destroyed or delayed for a year. That's costly.
    So its not factual then. Thanks.

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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by Peter King View Post
    Yeah, not talking about 1 or 2 jobs lost, or even 100 or 1,000.



    U.S. exits GM stake, taxpayers lose $10.5 billion - NBC News.com
    Whats the difference? If the govt is going to have a policy of paying businesses not to fire people, then it might as well go all the way. Wouldnt that be good for the economy? Tax the rich, employ the poor.

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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by Jack Hays View Post
    The US lost $10 billion on the GM bailout. What do you think about that?

    Treasury sells last shares in GM, posts a loss of $10 billion

    Danielle Douglas DEC 9
    The government will lose $10 billion on the deal, which kept the automaker from collapsing.

    "The Treasury Department announced Monday the sale of its remaining shares in General Motors, closing the books on one of the most controversial government interventions of the financial crisis. The government will lose $10 billion on the deal, which kept the automaker from collapsing."
    More hope and change-in the mean time, we support and prop up failing business models. What could go wrong?

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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by Jack Hays View Post
    I suspect that we share the view that old fashioned bankruptcy would have been better.
    Where would the money come from, the credit markets were closed at the time. And what billionaire would invest in a failing automobile company?

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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by Lutherf View Post
    Actually, most of that would happen pretty quickly. Companies go bankrupt all the time and we see these transitions dozens of times each year. GM would have been one of the bigger transitions but the process wouldn't have been much different. The ones who would get screwed would have been the pension beneficiaries. The pension plan would go to PBGC and benefits would get slashed but that would be nothing like an $11B hit.

    The flip side is that the salvaged parts of the business would be set up to run without many of the encumbrances GM was subject to and thus would be able to produce at higher rates which would offset a lot of (if not all) the negative economic impact.
    So you are saying by "pretty fast".. a day or two, or a couple of months or several years?

    This is one of the biggest companies in the US, so the complexity of such a bankruptcy would be massive. Alone figuring out the value of the different parts of the company would take a while, and add in time for the creditors get a claim in and so on. All in the while the workers are fired, unemployed and the burden is pushed on the state.

    Now if you think that the other car manufactures will pick up the slack, then you forget the situation. Chrysler was also broke, and Ford was hurting. Had GM gone, and Chrysler also (took a long while and wheeling and dealing to allow FIAT to buy them), then the whole supply chain that also supplied Ford and other car companies.. well it could easily have collapsed.

    People on the right seem to think that the free market in its current form is dynamic and quick... it aint and never has been. It is slow as hell to react.. else why did GM get into trouble in the first place?

    Of course this depends on what kind of bankruptcy they would have done.. they could have done an "airline" bankruptcy, where they screwed over their workers and kept on functioning.
    PeteEU

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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by pbrauer View Post
    Where would the money come from, the credit markets were closed at the time. And what billionaire would invest in a failing automobile company?
    It would have been a good buy and there would have been no trouble with financing. Those are excuses. With bankruptcy, the price falls until a buyer steps forward.
    "It's always reassuring to find you've made the right enemies." -- William J. Donovan

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    Re: US Lost Ten Billion Dollars on GM Bailout

    Quote Originally Posted by Jack Hays View Post
    It would have been a good buy and there would have been no trouble with financing. Those are excuses. With bankruptcy, the price falls until a buyer steps forward.
    Oh well, today we have hundreds of thousands of people who have a decent job and are paying Federal Income taxes. Factor that in the 10 billion what is then? I say President made a wise decision. And the supply chains was a key reason why he won Ohio.

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