Friday, April 23, 2010

GM Pays Back TARP Loan With TARP Money? Wish I Could Do That!

Since GM recorded a loss last year, as an accountant, I was wondering where GM got the cash flow to pay back the TARP loan. I guess it is no secret now. We, the taxpayers, paid it back to ourselves???? Reason, to exclude Government Motors from a new TARP tax proposal??????? Just as unions get preferential treatment from the Democrats, GM is getting tax advantages from them, in effect, tilting the playing field in the auto industry toward GM. Wonder what Ford shareholders have to say about that. This government is totally "Chicago" and totally corrupt!

General Motors (GM) yesterday announced that it repaid its TARP loans. I am concerned, however, that this announcement is not what it seems. In fact, it appears to be nothing more than an elaborate TARP money shuffle.

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. When these criticisms were put to GM’s Vice Chairman Stephen Girsky in a television interview yesterday, he admitted that the criticisms were valid:

Question: Are you just paying the government back with government money?

Mr. Girsky: Well listen, that is in effect true, but a year ago nobody thought we’d
be able to pay this back.

Mr. Girsky then said that GM originally planned to pay the loan over the next five years. So the question is why—other than a desire to justify excluding GM from the administration’s TARP tax proposal—would Treasury and GM reduce GM’s TARP debt with TARP equity and then mischaracterize it as a repayment from earnings?
Read Grassley letter here.

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