• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

GM Pays off its Bailout Loans

And, there is no changing the fact that the government will eventually sell the part of GM that we now own, and will recover most, perhaps all and then some, of the money that we spent in purchasing part of GM.

And how do you figure that?

You people just don't want other people to realize that the bailouts, in all the forms they came in, have gone generally well, and that they saved us all from abject misery. Cuz that would affect the upcoming elections.

You're right. I don't think they have gone well at all and to pretend they have is amusing to say the least.
 
Again, No it is not.

They only paid back part of the loan.

Loan- An arrangement in which a lender gives money or property to a borrower, and the borrower agrees to return the property or repay the money, usually along with interest, at some future point(s) in time.

loan Definition

So again it is not factually correct they paid back the loan. Just because the government was stupid enough to give them interest free money that doesn't change the fact it is still a loan and 43 Billion has not been paid back.

Since when is taking out an equity stake in a company refered to as a loan?
 
And how do you figure that?
Figure what? That we will sell the stock that we own in GM? Or that we will get around 43 billion for it?
 
Read the definition of loan again.

When you buy stock (equity) in a company, you are not loaning them money. You are giving them money and they are giving you part ownership in the company in exchange.

They are under no contract to ever pay you back. We bought stock in GM for about 43 billion. We will sell the stock on the New York Stock Exchange. We may get 2 Billion for it. We may get 100 Billion for it. It will depend on how much the stock is worth when we sell it.
 
Fox News article on the GM bailout repayment...

"The bottom line seems to be that the TARP loans were 'repaid' with other TARP funds in a Treasury escrow account. The TARP loans were not repaid from money GM is earning selling cars, as GM and the administration have claimed in their speeches, press releases and television commercials."
Sen. Chuck Grassley

Hmmmm...interesting...

Still, atleast they didn't blow taxpayer dollars. (Okay, so I was trying to soften the blow...:2wave: )

When you buy stock (equity) in a company, you are not loaning them money. You are giving them money and they are giving you part ownership in the company in exchange.

They are under no contract to ever pay you back. We bought stock in GM for about 43 billion. We will sell the stock on the New York Stock Exchange. We may get 2 Billion for it. We may get 100 Billion for it. It will depend on how much the stock is worth when we sell it.

The following is a short exerpt from the bailout agreement between the U.S. and Canadian governments and GM:

- The U.S. Treasury is prepared to provide approximately $30.1 billion of debtor in possession financing to support GM through an expedited chapter 11 proceeding and transition the new GM through its restructuring plan. The U.S. Treasury does not anticipate providing any additional assistance to GM beyond this commitment. In exchange for funds already committed by the U.S. Treasury and the new injection of $30.1 billion, the U.S. government will receive approximately $8.8 billion in debt and preferred stock in the new GM and approximately 60% of the equity of the new GM. The U.S. Treasury will also have the right to appoint the initial directors other than those that will be selected by the VEBA and the Canadian government.

· The Governments of Canada and Ontario will participate alongside the U.S. Treasury by lending $9.5 billion to GM and New GM. The Canadian and Ontario governments will receive approximately $1.7 billion in debt and preferred stock, and approximately 12% of the equity of the new GM. Based on its substantial financial contribution, the Canadian government will also have the right to select one initial director

The summary brief as reported in the Chicago Sun-Times (June 1, 2009) can be read here.
 
Last edited:
Fox News article on the GM bailout repayment...


Sen. Chuck Grassley

Hmmmm...interesting...

Still, atleast they didn't blow taxpayer dollars. (Okay, so I was trying to soften the blow...:2wave: )

Actually, this is still blowing taxpayer dollars. Essentially, this is what happened, according to Grassley's claims (exact figures are off):

GM received 8 Billion in loans, and 43 billion in cash from selling shares of GM stock to the government. There was also some unused money, say 7 Billion that went into an escrow account. This money was intended to be used by GM if needed. GM took out this money and repaid its loan.

This is still blowing tax dollars - the money didn't magically appear.
 
When you buy stock (equity) in a company, you are not loaning them money. You are giving them money and they are giving you part ownership in the company in exchange.

They are under no contract to ever pay you back. We bought stock in GM for about 43 billion. We will sell the stock on the New York Stock Exchange. We may get 2 Billion for it. We may get 100 Billion for it. It will depend on how much the stock is worth when we sell it.

This is factually incorrect. We first lent the money to G.M. This loan was then converted to an equity stake. GM is still losing money and has a huge underfunded pension liability.

Unlike the deal most of the banks were forced to take and which the government has already made money this deal will be a loser.

Just a question for the folks here. Is it a debate when people just make up facts? Probably for FOX or MSNBC, but not sure about the standards here.
 
This is factually incorrect. We first lent the money to G.M. This loan was then converted to an equity stake. GM is still losing money and has a huge underfunded pension liability.

Unlike the deal most of the banks were forced to take and which the government has already made money this deal will be a loser.

Just a question for the folks here. Is it a debate when people just make up facts? Probably for FOX or MSNBC, but not sure about the standards here.

While I wasn't aware that there was first a loan that was converted to an equity stake, it makes no difference. It is still a fact that GM is under no obligation to pay the 43Billion and does not intend to. It is still a fact that we will sell the equity on the open stock market, and that whatever we get for selling those shares is all that we will get toward the 43 Billion. Whatever it was to start with, it is no longer a loan.
 

You know what this means, don't you?

Michele Bachmann has to drop "government takeover of the auto industry" from her list of moronic talking points.

Apparently in her little teabrain, any time the federal government supports a specific company to avoid potentially devastating unemployment, poverty etc.-- that a 'takeover'.:roll::roll:

Does that mean we invaded and took over Haiti?:confused:
 
While I wasn't aware that there was first a loan that was converted to an equity stake, it makes no difference. It is still a fact that GM is under no obligation to pay the 43Billion and does not intend to. It is still a fact that we will sell the equity on the open stock market, and that whatever we get for selling those shares is all that we will get toward the 43 Billion. Whatever it was to start with, it is no longer a loan.

True. The equity portion the U.S. and Canadian governments took back from the remaining $43B won't be paid back in cash w/interest, but I think that as long as the government keeps pressure on GM to do what it's suppose to do - make good, quality cars the people want - and the price of their stock increases in value beyond what it was up until the government took 60% ownership in the company, the taxpayers will get their money back when the stock is sold.

I agree...it's a big risk, but as long as the stock's value goes up OR the stock splits and still increases in value, all will be just fine.
 
True. The equity portion the U.S. and Canadian governments took back from the remaining $43B won't be paid back in cash w/interest, but I think that as long as the government keeps pressure on GM to do what it's suppose to do - make good, quality cars the people want - and the price of their stock increases in value beyond what it was up until the government took 60% ownership in the company, the taxpayers will get their money back when the stock is sold.

I agree...it's a big risk, but as long as the stock's value goes up OR the stock splits and still increases in value, all will be just fine.

I fully agree with you. People here have been trying to say that GM somehow is obligated or expected to pay back the 43 billion. I have been saying that they are NOT. I have also said I expect that we will likely make back close to the 43 billion and perhaps more, when we sell the shares of ownership.

I imagine this is probably due to their listening to rabid right wingers who would like to make it SEEM like GM is not living up to its obligations, so as to make all this out to already be a failure.

Evaluations as to whether it is a success or failure are premature. I won't judge this until we actually do sell the stock and recover our investment. If we sell the stock and recover 35 Billion in stock sales, I will consider the effort to have been successful toward the goal of mitigating a part of the financial crisis that we clawing our way out of. If we sell the shares for more than 43 Billion, I'll be dancing in the streets and rubbing the rabid right wingers noses in it.
 
While I wasn't aware that there was first a loan that was converted to an equity stake, it makes no difference. It is still a fact that GM is under no obligation to pay the 43Billion and does not intend to. It is still a fact that we will sell the equity on the open stock market, and that whatever we get for selling those shares is all that we will get toward the 43 Billion. Whatever it was to start with, it is no longer a loan.

Correct it is not a loan. Many people consider it a very expensive payback to the unions which helped Obama get elected.
 
True. The equity portion the U.S. and Canadian governments took back from the remaining $43B won't be paid back in cash w/interest, but I think that as long as the government keeps pressure on GM to do what it's suppose to do - make good, quality cars the people want - and the price of their stock increases in value beyond what it was up until the government took 60% ownership in the company, the taxpayers will get their money back when the stock is sold.

I agree...it's a big risk, but as long as the stock's value goes up OR the stock splits and still increases in value, all will be just fine.

Funny that you folks compalin about a " bailout for banks" which was reallt a ripoff of most of the banks. But the money we threw at GM is fine.

Seems to show that the concern is not government guarentees, but if the money goes into the pockets of political friends.
 
Correct it is not a loan. Many people consider it a very expensive payback to the unions which helped Obama get elected.
Unless it ends up not costing us anything, which it might not. We just can't know, yet.

So, you're clearly mad that these hard working Americans had their jobs preserved during a economic meltdown. Why? Because they are a union? You would rather they were punished for being a union, I take it. Let them suffer cuz it's unfair that they were earning so much money dammit!!
 
Unless it ends up not costing us anything, which it might not. We just can't know, yet.

So, you're clearly mad that these hard working Americans had their jobs preserved during a economic meltdown. Why? Because they are a union? You would rather they were punished for being a union, I take it. Let them suffer cuz it's unfair that they were earning so much money dammit!!

If you understand business then you know that the people working in the factories would have kept their jobs. The company would have gone into bankruptcy and been reorganized.

Don't try to play mindreader, you are not good at it. I am tired with the government playing who wins and loses.

I am mad because people are very willing to " spend" money they don't have on noble causes. I will be a lot more impressed when this administration and its supporters tell us we need to do X, therefore we need a surcharge on everyone's taxes on Y dollars. If we get the money back we will refund it.

Just so you know I said the same thing about Reagan and his tax cuts.
 
Read the definition of loan again.

Uh, not quite. I do believe that the equity stake in GM is preferred stock, which under some circumstances is like debt. However, GM does not have to call the preferred stock if it does not want to. Unlike a bond, GM can sit on that preferred stock as long as it wants to. Sure the rates are insane considering, but the equity stake of preferred does not allow the government to force payment. So in that aspect, it is not a loan.
 
Funny that you folks compalin about a " bailout for banks" which was reallt a ripoff of most of the banks. But the money we threw at GM is fine.

Seems to show that the concern is not government guarentees, but if the money goes into the pockets of political friends.

Us folks I think mostly complained that we did not like any of the bailouts, but that the alternative was worse.
 
Hell, even if we do lose the ENTIRE $48+ billion, we're probably still ahead. Why you ask? The reduction in workforce from cascading failures from GM's liquidation would be devastating. Merely the unemployment benefits could easily run past the bailout package, much less the other economic impacts from severe reductions in business spending.
 
Us folks I think mostly complained that we did not like any of the bailouts, but that the alternative was worse.

Explain what a bankruptcy for GM would have looked like. Pretty much what the company looks like today. Also if you are truthful, most Obama supporters were in favor of bailing out GM.
 
Explain what a bankruptcy for GM would have looked like. Pretty much what the company looks like today. Also if you are truthful, most Obama supporters were in favor of bailing out GM.

I do not know for sure, nor do you.
 
I do not know for sure, nor do you.

But I can have an educated guess. There is no reason to believe that the way the company functions today would be different than had it come out of bankruptcy.

The problem is that most of the public does not understand any of this. They blindly believe the soundbites from which ever side. No wonder it is so easy for polititcians to consistantly work against the best interests of their supporters.
 
Back
Top Bottom