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Saturday, April 24, 2010

Did GM Payback the Tax Payers

The FTC says no and GM may be in big trouble.

General Motors is running ads on all the major networks this week claiming it has repaid its bailout from the taxpayers "in full." But the claim isn't standing up to scrutiny from lawmakers and government watchdogs who have found that the automaker was able to repay the bailout money only by dipping into a separate pot of bailout funds.

The TV spot may land GM in hot water with the Federal Trade Commission

over its truth-in-advertising laws, which prohibit ads that are "likely to mislead consumers."

"We have repaid our government loans in full — with interest — five years ahead of the original schedule," says Ed Whitacre, chairman and CEO of General Motors Company, asking Americans to give the bankrupt company another look.

GM paid back the taxpayers through Enron style accounting. They paid back the tax payers with another set of tax payer funds. So, GM's claims is absurd on it's face and it may violate truth in advertising claims.

Of course, if GM is stretching the truth in their ads, what are we to make of Joe Biden? He called this so called pay back a "great accomplishment." What are we to make of the media that reported this so called payback as though it was legitimate? In fact, what are we to make of the media still that hasn't yet reported the truth. The truth is that GM used a separate fund of tax payer bailout funds to pay back this set of taxpayer funds. They still owe the tax payers about $50 billion. They will not any time soon pay back the tax payers. That's the truth.


United Citizens Council said...

It may go bankrupt before the taxpayers are ever paid back. Or maybe its hoping for hyper-inflation.

Anonymous said...

I thought it was a debt for stock swap or something... kind of like what citibank did.

I think the auto fleet in this country has peaked in 07/08 and probably won't grow to that size for an exceptionally long time.