Tuesday, April 27, 2010

Smoke and Mirrors

As everyone now knows, GM's claim to have paid back all of their bailout money ahead of schedule and with interest is at best a public relations stunt.

While the claims were quickly jettisoned by Forbes Magazine, the claims were accepted in some quarters that the bailout money was wisely spent and that the American taxpayers actually came out ahead on the deal.

Leaving aside GM's magic show, I'd like to know how American taxpayers would have gained had the money been paid back in full (with interest.) Would the principle and interest have been applied to the debt? Would the money recovered from the bailout have been reapplied to a budget deficit the likes that have never before been seen on this Earth?

The fact is, unless true principle and profit are directly applied to the debt (which this wasn't in any case) the grandchildren and great grandchildren of American taxpayers will be on the hook for the money. If there had been a profit, which there wasn't, and it had been invested back into other facets of the bailout to be used to otherwise stimulate the economy, which it would have been, the taxpayers would still have to walk away with the bill.

Smoke and mirrors folks. The smoke distributed by GM, the mirrors a donation by your government.

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