This week I heard the news that GM was paying off their debt early. My first reaction was that this is good news since I was not a fan of the bailout and I want to see GM stand on its own as quickly as possible. Of course, the question that came to mind that was not answered in the article I read was, where did the money come from? Let’s face it, if they had several billion lying around they would not have needed the bailout. My assumption was that they took out a loan or did some other normal method of raising cash to pay off the TARP loan. I was shocked that the funds came from a line of credit available in the TARP program. So they paid of the loan by taking another loan. What a joke. This is the kind of gimmicks the government does with their books. Money spent does not add to the deficit because it is are “off budget”. There is a “trust fund” for Social Security. And so on.
GM is doing this because they are hurting from the stigma of being Government Motors and they are looking to whitewash reality rather than take the right steps to change the situation the right way. We are on to them and it will take a more serious effort than this if they want to turn it around.
Until then, when I buy American, it will be Ford. They may have debt up to their eyeballs but they are managing on their own without the help of big brother. Based on the fact that Ford is in the black, I expect I am not alone.
- FOP Vermillion