Reason, NYT agree: GM repaid your money with your money
There has been some confusion in the comments threads on other posts about whether or not GM has repaid the federal government. With that in mind, I offer the following.
Strictly speaking, GM wasn’t lying when its chief executive, Ed Whitacre, announced last month that the company had “repaid [its] government loan, in full, with interest, five years ahead of the original schedule.” The key word was “loan,” as Reason.tv editor Nick Gillespie explains in this video:
The video played a bit slowly on my computer, so I’ll summarize here:
The federal government devoted some $50 billion in TARP money — originally intended for financial companies — to bail out GM last year. Of that, $6.7 billion was classified a “loan,” while $13.4 billion was put into an escrow account at the Treasury for GM to tap. (The remainder was a U.S. government investment in the company’s stock — an investment that hasn’t been paid back, and which will produce a loss unless GM surpasses its previous high in market capitalization by more than 20 percent.)
To “repay” the “loan” portion of the bailout, GM tapped some of the money in the escrow account — that is, money that also came from taxpayers.
In other words, if you want to see the entire $50 billion repaid, you’re still waiting for GM to pay…$50 billion.
At the New York Times, Gretchen Morgenson reports much the same, with the additional detail that neither GM nor the Treasury considers the $13.4 billion in the escrow account as money that GM must repay:
Herbert M. Allison Jr., assistant [Treasury] secretary for financial stability, confirmed that the money G.M. used to repay its bailout loan had come from a taxpayer-financed escrow account held for the automaker at the Treasury.
Emphasizing that the cash in the account was “the property of G.M.,” Mr. Allison said that the department had approved the company’s use of the money to retire the original debt because it was “consistent with Treasury’s goal of recovering funds for the taxpayer and exiting TARP investments as soon as practicable.”
So, the escrow money was not a loan but a gift; it’s the “property of GM,” not a debt owed to us by GM. The feds for all intents and purposes have written off that $13.4 billion, or at least the portion which GM already has spent.
Just something to keep in mind in the coming weeks as Congress debates new policy that will or won’t lead to future bailouts.
Tell us what you think about the site
Customer Care »
Vacation stops, manage subscriptions and more
AJC Services
Sections
Other Editions
Visitor Agreement | Privacy Statement
© 2013 The Atlanta Journal-Constitution
104 comments Add your comment
JKL2
May 3rd, 2010
2:35 pm
scurvy-
The difference is I don’t have a free car in my driveway. I suspect you don’t either.
GM paid off a government loan with another government loan. In the real world it is called check kiting and you can go to jail for it. If you want to make donations to GM (or any other company for that matter) feel free. Keep your hand out of my back pocket.
Peter
May 3rd, 2010
2:35 pm
OK Jess what am I ignorant about……Can you defend your statement ?
Hey Mike….You chimed in……..What are you speaking about as well……
Perhaps the both of you don’t really have a defense of your statements….. just spewing like the oil well.
lkdhf
May 3rd, 2010
2:36 pm
port o john – cars lead to traffic deaths. ban all cars
Peter
May 3rd, 2010
2:37 pm
Imagine a world where folks can create their own power ?
I guess Republican’s and energy companies would really hate that thought !
Peter
May 3rd, 2010
2:38 pm
Well here is more spewing without any content at all……..
lkdhf
May 3rd, 2010
2:36 pm
port o john – cars lead to traffic deaths. ban all cars
Peter
May 3rd, 2010
2:43 pm
The one thing that really stands out on the “Republican Blog” is the lack of EMPATHY……
I find it hard to believe these folks call themselves Christian, and actually do go to church on Sunday.
I wonder what they actually learn in church ?
retiredds
May 3rd, 2010
2:52 pm
JKL2, I firmly disagree with you that America is no longer the “land of opportunity”. New businesses and entrepreneurial enterprises are being started every day. America is the one country on earth that innovation and creativity are allowed to flourish, in spite of regulation. It is the Rush Limbaughs and the John Becks that want you to think that America is no longer the land of opportunity. The more negative those morons are the more money they make because so many people buy into their paranoia. Quite frankly just what is it that they do which contributes to the welfare of our society? ZERO, nada. About all they have to offer is the toxicity of hate, bile, and negativism. With all its faults I will stack up this country against any other in the world, today and tomorrow. Do you think Warren Buffet would agree with you? I would say not. Warren and other savvy investors are continuing to invest in America because we believe in it. So you say this is no longer the land of opportunity, I say to you, hogwash.
JKL2
May 3rd, 2010
2:57 pm
Peter-
Have all the empathy you want. Just leave your hand out of my pocket. Nowhere in the constitution does it say the governments main function is charity.
The difference is simple:
Conservatives help people.
Liberals help people with other people’s money.
Here’s what I learned in church. If you give a man a fish you feed him for a day. If you teach him to fish, you feed him for life.
Guess where the Obama government of borrow more money so we can buy more fish to hand out is going to lead us?
Peter
May 3rd, 2010
3:03 pm
Please site an example ……
The difference is simple:
Conservatives help people……… Who the rich ?
Fix-It
May 3rd, 2010
3:07 pm
You know I went to the bank for a $200,000 loan and they gave it to me, then I asked them for a $200,000 “gift” so I could repay that loan. They looked at me like I had three eyes, and that is exactly what we should have done. Why does Obozo bash and profitable business then shower them with gifts from us? Sounds like we need an investigation…. Opps I forgot did I need to tell them I was a union man?
JackLeg
May 3rd, 2010
3:10 pm
Peter, you are ignorant beyond belief, who has Obozo and the dimacrats helped? So far they have ONLY helped people who are millionaires. I need my taxpayer funded million dollar bonus, or my 13 billion dollar gift to the unions. Wake up Peter, life is a lot harder when you don’t know the facts…. And liberals will NEVER let the facts get in the way…. losers
JKL2
May 3rd, 2010
3:14 pm
retiredds-
Half the comments on this website is “it’s whitey’s fault. How can I expect to get anywhere without government handouts. I’m just a poor african american whose great, great, great, great grandparents were slaves. Whoa is me.”
Immegrants (illegal and otherwise) see this as a land of opportunity. Too many Americans just see this as a country where life isn’t fair and success means you were able to scam somebody out of their money. Our poverty level is now 2 TV’s, cable, and a cell phone. I understand people need help, but I also understand they need to take responsibility for their actions. Freedom takes responsibility.
Hard work and education used to be the secret to success. Now if you want hard work you probably have to hire an immegrant. Our kids are to fat. lazy, and stupid.
Peter
May 3rd, 2010
3:20 pm
Hey Jackleg……… You sound sooooooooo Intelligent……. Where are your facts ?
mit
May 3rd, 2010
3:32 pm
jkl2, why put your idea off on Obama? your idea is to have more oil from america and less from other countries. The only way to do that is nationalization.
Who exactly are you paying for? You have some sort of spreadsheet that lists all the people who has taken your money? You don’t make enough money to help that many if your blogging all day. so quit whining about people getting handouts that you prolly use too.
JKL2
May 3rd, 2010
3:39 pm
Peter-
George Bush $874k to charity
Dick Cheney $7.2mil to charity
Al Gore $353 to charity. (note the lack of k or m in the number)
Obama and Biden have equally miserable histories when it comes to charity.
When you give to charity it’s called generosity. When the government takes your money to use as charity, it’s called bureaucratic theft, fraud, waste, and abuse. There’s a reason we celebrate Thanksgiving and Christmas. Nobody I know celebrates April 15th.
JSD
May 3rd, 2010
3:47 pm
Peter is a funny name because it also a name for your ……….
Algonquin J. Calhoun
May 3rd, 2010
3:50 pm
GM is manufacturing good automobiles and is deserving of the support of our government and consumers. Part of being a patriot is supporting American made products. Our workers are the best in the world and products produced here are the best in the world. Drive a GM or Ford, not a Kamikaze auto you can’t control! By the way Kyle, why weren’t there more regulations controlling off-shore drilling?
Peter
May 3rd, 2010
3:56 pm
Charity…….JKL2…. ???????? name them…….
WAW
May 3rd, 2010
3:58 pm
In October 2008 (back you guys were saying Obama would never be elected), GMAC was declared a Commercial Bank same Citi, Goldman Sacks etc. Remember those radio commercials for “ditech.com” encouraging you to refi so you could cash-out your equity so your dreams could become reality. Well, that we GMAC Mortgage and just like all the other sub-prime predatory lenders, they cried to the gov for help, and got it. But in the getting, they almost brought down the goose that had laid the golden egg, GM their owner. Ford didn’t have that problem because Ford Motor Credit stuck to financing cars made by Ford.
Long and short of the matter is that a Republican (Bush) and Democratic (Obama) government had to make right the screw up of the Republican controlled congress and the Clinton Administration when they listened to Gramm-Leach-Bliley and passed the Financial Modernization Act which repealed the Glass-Steagall Act under which GMAC would not have be in the Mortgage Business in the first place.
This is not a liberal / conservative, or republican / democrat problem. It is 1929 all over again and until the financial industry is RE-regulated as Roosevelt and the Republicans did in the ’30’s it will continue. It ain’t over!
Algonquin J. Calhoun
May 3rd, 2010
3:58 pm
Hard work and education used to be the secret to success. Now if you want hard work you probably have to hire an immegrant. Our kids are to fat. lazy, and stupid.
They come from fat, lazy, stupid parents. have you procreated more fat, slobby, parasites JLK? I bet you’ve got a trailer full boy!
Algonquin J. Calhoun
May 3rd, 2010
4:01 pm
Dick Cheney $7.2mil to charity
Where did that swine get 7.2 million bucks? He’s never held a job in his miserable life!
JKL2
May 3rd, 2010
4:01 pm
mit-
I guess we need to talk to the oil geenie who make the gas magically appear at the pump why it costs so much. We obviously don’t use any gas so why bother drilling. Thanks for correcting me.
Started working when I was 14 and haven’t stopped yet. I have never received assistance from any government program that I know of. I do give to about 20 charities and do volunteer work.
I like to help people I want to help, not whomever the government thinks it would be cool to send a check too. Example Haiti. The government pledges $100 mil in aid. Since the government doesn’t make money, it has to get the money from me in the form of taxes(or under the current administration we borrow it from China and pay them interest as well).
If I give $100m to the Red Cross, $92,000,000 gets to Haiti
If I give $100m to the government, $36,000,000 gets to Haiti
Which does more good for Haiti? Quit forcing me to give my money to the government and we’ll all be better off.
JKL2
May 3rd, 2010
4:06 pm
United way and red cross are the big names. Mostly Veteran organizations.
Don’t expect to get anything over the phone either. Only leads to credit fraud and stolen identity.
JKL2
May 3rd, 2010
4:16 pm
Al-LOL
I hope you’er joking but here goes. 1 boy, 1 girl, married 18 years. Son is lazy(teenager) but both get straight A’s and neither is overweight. My wife is overweight but you’ll have to take that up with her.
Agree with the stupid lazy parent part. Mostly from self centered parents who never should have had children in the first place.
Dick Cheney never had a job? You never heard of Haliburton? You must be the only one on here that doesn’t know that. Or else you are confused with the Obama administration who has never held a job (92% career politicians. Second lowest is JFK with 65% career polititions)
Cheney makes somewhere between $20-30 mil a year.
somewhereinga
May 3rd, 2010
4:17 pm
JKL2 said “Obama and Biden have equally miserable histories when it comes to charity.”
Actually Obama gave almost 10% of his 2009 income to charity and ALL of the 1.4 MILLION of the Nobel Prize to charity but it was not included as income. Hardly “miserable”.
retiredds
May 3rd, 2010
4:19 pm
JKL2, your last post to me says it all.
JKL2
May 3rd, 2010
4:36 pm
somewhere-
He gave away the money from the prize he didn’t deserve. Good to know.
“Up until recent years when their income increased sharply from book revenues and a Senate salary, Obama’s family donated a relatively minor amount of its earnings to charity. From 2000 through 2004, the senator and his wife never gave more than $3,500 a year in charitable donations — about 1 percent of their annual earnings”
I guess now that he is rich and making more money than he deserves he has opened the purse strings a little. Better late than never I guess. But I would expect a little more from someone who has spent his entire life helping out the misfortunate. I guess I’ll have to use my “liberals like to help with other people’s money” line again.
Peter
May 3rd, 2010
4:38 pm
Look at the Big Brain on…….JKL2 …..WOW……. he introduced Al Gore….a guy who only wants to save the earth into the Mix, someday your children will thank you……… unless they are doing Republican things like taking advantage of someone.
Please note JKL2 seems to state…. as long as you give to charity, one can have Secret Energy meetings, and include the likes of Enron…….One can write cost plus contracts and Bilk the American people, after Making up a WAR, and making up “weapons of Mass Destruction”.
We should note the 3 trillion dollar WAR bill handed to the American public, with out any means to pay it….. which of course was never attached to the already floundering Budget report.
Yes Bush IS the ONLY president in the HISTORY of the USA, to start a war and CUT taxes. Seems kind or reasonable…..unless you are an accountant.
Remember we did have “Mission Accomplished”…..that was the ripping off of America…Well done chaps.
We also should thank Bush for his “Terrorist Protection Policy”……allowing Bin Laden his freedom, as we invade another country…….seems it was easier to spend 3 Trillion dollars then to find a guy hiding out…..not to mention the money all their friends got to make.
Seems Terrorism is in good health……thank you Bush and Cheney.
Also as a side note……Thank you for starting the War in Iraq, and leaving the mess for someone else to finish, and work out.
We also should thank the pair for lax regulations in the oil industry, whom has made Billions while they were in power, and now is destroying the environment…..and charging you more for gas as they deem fit…….. I guess bilking California was lots of fun.
They also passed laws giving folks tax write offs for owning gas guzzling vehicles, and never ever got the US moving in an energy efficient way of life……that is really not good for their buddies.
Of course we never mentioned the handling of the economy, which went into a melt down after 7 plus years of Masterfully handling it.
I am so proud of them for giving a small piece of ripped off American public’s money to charity !
Bravo to them.
Peter
May 3rd, 2010
4:41 pm
Ahhhhhhhh Haliburton…….the group that is responsible for the cement work……..gosh gotta love an organization like that.
mit
May 3rd, 2010
5:31 pm
jkl2, reading isn’t everything. it helps if you can comprehend too. since i never said anything about an oil genie, which you spelled wrong. whoever keeps spelling immegrant stop it. its annoying unless you are trying to be funny. if you are, you suck at it.
mit
May 3rd, 2010
5:32 pm
jkl2, drill here, drill now will not stop us from getting oil from other countries and it sure will not lower the price of gas. if you think it will, you are an idiot.
Michael H. Smith
May 3rd, 2010
6:17 pm
Oh GM paid us back with our own money that we gave them, so that means they really did pay back their loan?
Kyle, from liberals I would expect such non-sense.
GM has really paid nothing back on that loan. GM simply gave us taxpayers back part of the gift money we gave them via Congress and they insultingly chose to call it a loan repayment. There will likely be some backlash from this cutesy little PR stunt GM tried to pull over on the American people.
Michael H. Smith
May 3rd, 2010
6:34 pm
So liberals you don’t like drill here drill now because as you see it that means spill here, spill now is that about right?
Just so happens we drill over there and drill now but what we spill over there, we’ll not stop spilling for a long time, if we stop drilling here and drilling now.
http://www.youtube.com/watch?v=G6_PRzP0R88
We can’t get to clean energy independence without a well planed strategic transition from oil to alternatives, get that fact through you dead brains. Secondly, oil is not all that we are drilling to find and bring to market. America, as it just so happes possesses the world greatest quantity in reserves of natural gas and methane – A 100 years estimated supply.
Drill Baby, Drill! or Die Baby, Die!
You Distort/We Deride
May 3rd, 2010
6:51 pm
Kyle wouldn’t have much of an audience to reach if every major corporation folded under the weight of our economic disaster.
Anyone who cries about how Obama has gone about his business is conveniently overlooking the certain tragedy of a McCain/Palin leadership amidst this crisis.
Bob in Fayetteville
May 3rd, 2010
6:56 pm
Let’s get off of the which administration is responsible for what, folks. Look at the facts: Does it make sense that GM can claim that they’ve paid back a debt with money from a “free” grant from the gocernment that came from us in the first place? It’s robbing Peter to pay Paul! No matter how you look at it, it’s WRONG!
While I feel sorry for the plant workers (but not the union aspect of them), I will NEVER buy another GM product!
Michael H. Smith
May 3rd, 2010
7:01 pm
Obama, at least up to this point as I know events, has handled this oil spill and drilling for oil appropriately. Can’t say the same for the Governor of California.
BP may be the first major corporation to fold under the economic weight of the law from this disaster.
Linda
May 3rd, 2010
7:36 pm
I will never, EVER buy a GM car ever again, even if it’s only a $1000.
JKL2
May 3rd, 2010
7:38 pm
Peter-
Al Gore wants to save the planet. It probably has nothing to do with the $2 Trillion his company is looking to make thru cap and tax. God bless America and all the tax payers he can rob. You too can buy air from a 3rd world country. Now that’s a business we all can get involved in.
Dick Cheney sold all his interest in energy stocks because he didn’t want it to seem like he had a conflict of interest in developing an energy policy. Then he gets blasted for “dumping” his stock because jit looked like insider trading because he was working on an energy plan.
The WH often consults business when making regulations concerning them. They are in the business, so they probably would have some good ideas. Obama consults with Socialists,Marxists and communists. I guess it has something to do with “radically transforming the nation.” I’m guess our ides of “evil” is different.
“Mission accomplished” is one of the most genious things Bush did. Other countries said they wouldn’t become involved until the fighting stopped. So he told them “OK it’s over. Come on in”. Brilliant.
Bilking California. If you don’t produce your own energy, you are at the mercy of others. Kind of sounds strangely familiar (drill, baby, drill) The last I checked, the stock market is still open. You have an equal shot at buying Exxon and becoming an oil tycoon just like everyone else.
Clinton was offered Bin Laden twice and turned it down. Maybe you should point a finger his way. Bush was just cleaning up after him.
The Obama apology tour has made us the laughing stock of the terrorist world while he has been working overtime to alienate our allies. I feel safer already. If we understand them and tell them we love them they won’t want to kill us. Didn’t work in JR high, doesn’t work in foreign policy.
The economy started going in the tank right after the Dems took congress. We now have a clueless white house and the best Democratic leader has an 11% approval rating. I’m glad to see we’re in such good hands. When is that Jimmy Carter misery index coming back?
JKL2
May 3rd, 2010
7:50 pm
mit-
two broken fingers ruined my typing skills. sorry if I misspell things. Some I catch, but for the most part I don’t actually care. I’ll deal in theory. You can keep the gold star for grammar and punctuation.
I understand oil is an international commodity, but being able to produce our own oil will reduce fluctuations in the price. Building a refinery might help too since we have to have the oil refined overseas now since we can’t produce our own gasoline anymore.
Peter
May 3rd, 2010
8:41 pm
Yes…….JKL2 …..Bush was brilliant……….
Lacka Data
May 3rd, 2010
9:30 pm
I’ve never been one to paint an entire group bad with a single brush stroke, but perhaps I can make an exception for Wall Street. A land where every rock you turn over is hollowed out and filled with worms, the acrid corpulent decay fills out nostrils with the putrid smell of death and while we are heaving and weary with vomit, they steal our wallets..
mit
May 3rd, 2010
9:54 pm
you apologized? sucker. exactly how many countries joined in after the mission accomplished sign was waved? none? They started leaving instead retard. Bush was brilliant. He got a bunch of gullible retards to vote him in twice. We’ll make abortion illegal, just vote for me, promise. ohh ohh, i will take out all the contraceptions available to your kids so they can all say they are abstinent, and then catch an STD after you actually believed them. Listening to teenagers, great idea there. Now that the teen birth rate is back up we can start our tv show on mtv because we are anti-abortion and anti-life at the same time. now that bush is gone all you turn on beck and limbaugh now that its been long enough for you to forget his drug addiction while wanting to kill the rest of the addicts. Drug fiend much?
MAC
May 3rd, 2010
11:28 pm
The taxpayers didn’t bail out GM, the taxpayers bailed out the UAW and their fat pension plan, benefits and collective bargaining agreement, all of which would have been reduced or eliminated in bankruptcy.
Nobody in the Obama administration cares about the cars, it’s all about bailing out the guys who financed his election.
Peter
May 3rd, 2010
11:49 pm
Ahhhhhhhhh ….the Republican base…as stated………
Bush was brilliant. He got a bunch of gullible retards to vote him in twice…..
Well said…….. Thank you mit !
Bushdidit
May 3rd, 2010
11:55 pm
I heard Cheney was on a fishing trip in the gulf when all this occured, his tarpon went under the rig and the rest is history. Oh wait, this is about GM. Bush did that too. First he unleashed Katrina on New Orleans and now this. Why does he hate da Big Easy? How about it was a freak accident? Wall Street did what it was allowed to do by corrupt politicians on both sides of the aisle. GM bosses and unions ran the company aground, but were saved by us and will never repay us. Bret Michaels did a lot of drugs in the 80s and is sadly paying for it and the Braves ownership won’t open the checkbook to get the talent they need to win, (but we still love them.) Which reminds me, I wonder what Pascual Pérez is doing these days?
JKL2
May 4th, 2010
8:47 am
mit-
I would rather be remembered for pushing abstinance than the Clinton legacy of oral sex doesn’t count as sex. (if you don’t think that made an impact on teenagers at the time you are sorely mistaken)
Go ahead kids. Getting blown by your intern in the oval office doesn’t count as sex. Go ahead, try it. Nice example Mr President.
Morrus
May 4th, 2010
9:06 am
Here’s the bed we lie in:
In the Georgia Senate, 23 senators have no opposition in either the primary or general election (14 Republicans and nine Democrats).
In the Georgia House of Representatives, 91 representatives have neither primary nor general election opposition (46 Republicans and 45 Democrats). As a result, almost one-half of the Georgia Senate (56 total members) and over one-half of the Georgia House of Representatives (180 total members) will face no opposition in 2010.
Go back to sleep.
Guy Incognito
May 4th, 2010
10:02 am
Bushdidit:
PP just passed the ChambleeTucker exit for the 4th time today
Patriot
May 4th, 2010
10:18 am
It would appear that Whitacre committed a violation of Sarbanes-Oxley law enacted after ENRON. It is one thing for him to tout his cars to increase sales. It is somthing else for him as ceo to give out information that would influence investors or customers. This is the kind of crap that you get any time gov’ment gets involved with a business venture.
DawgDad
May 4th, 2010
10:53 am
All these bailouts are just another brick in corrupting the free world into a state of central authoritarian tyranny. There are no checks and balances any more; just a US treasury open for pillaging. The government has no business propping up private enterprises or trade unions; this is a symptom of pure corruption at its worst.