Here’s a shocker. I thought Cash for Clunkers was supposed to make the auto industry profitable once again. What a joke. (Via Free Republic)
Taxpayers face losses on a significant portion of the $81 billion in government aid provided to the auto industry, an oversight panel said in a report to be released Wednesday.
The Congressional Oversight Panel did not provide an estimate of the projected loss in its latest monthly report on the $700 billion Troubled Asset Relief Program. But it said most of the $23 billion initially provided to General Motors Corp. and Chrysler LLC late last year is unlikely to be repaid.
“I think they drove a very hard bargain,” said Elizabeth Warren, the panel’s chairwoman and a law professor at Harvard University, referring to the Obama administration’s Treasury Department. “But it may not be enough.”
The prospect of recovering the government’s assistance to GM and Chrysler is heavily dependent on shares of the two companies rising to unprecedented levels, the report said. The government owns 10 percent of Chrysler and 61 percent of GM. The two companies are currently private but are expected to issue stock, in GM’s case by next year.
The shares “will have to appreciate sharply” for taxpayers to get their money back, the report said.
How likely is it that shares are going to appreciate sharply? The government already screwed over shareholders in favor of making concessions to the unions. Who’s going to invest in these companies again? Thanks to the unions these companies don’t stand a chance of becoming profitable, but their members’ benefits are protected by us, the taxpayers. Must be nice to be them. Not so much for the rest of us. Again, unions win, taxpayers lose.
If my memory serves me, President Nixon had similar dillusions of grandeur with Amtrak. The federal government still owns Amtrak and it is still loosing money.
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A related posting from Newsbusters-To me this is unconstitutional seizure of property, but I am not a lawyer. If nothing else this whole process just highlights the total disregard for the Constitution and rule of law by this administration. http://newsbusters.org/blogs/tom-blumer/2009/09/09/2-billion-chrysler-double-cross-if-so-its-virtually-invisible
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There is nothing Constitutional about government taking over private industry. Americans have allowed this crap to go on for way too long. The health care bill the Dems want is also unconstitutional, for many reasons, but foremost because they bring in the IRS. Crossing the checks and balances of how our government is supposed to be set up, and this is not going to end pretty.
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