Want another reason why the government should stay out of business?

The federal government just lost $1.3 BILLION dollars on the sale of Chrysler stock. What a bargain! Who's bright idea was that? Please keep in mind that it was TAX DOLLARS that bought the Chrysler stock during the bailout.

Do you feel a little lighter in the wallet? Probably not, if you are like me your wallet was empty already anyway.

If you can stomach it, read more about it here...

The Truth About the GM Bailout

Remember when Ed Whitacre, the ceo of GM said that GM had paid back the taxpayers in full?



Umm, not so much. Read the article below. It tells a little different story. You know, I really hate being lied to. If you have spent any time on this blog, you know I am a DIE HARD Chevy guy. I will NEVER buy another new GM product, ever. I will still buy the hell out of the old stuff though.

GM still owes us, the taxpayers, BILLIONS of dollars, and, just like most things obama does, the entire bailout adventure was unConstitutional...

By Matt Kibbe - FoxNews

With Chrysler and GM announcing they have repaid their government loans, it did not take long for Democrats to crow that the federal auto bailouts were a clear success. Indeed, the president and his supporters hope to make political hay from these efforts for the 2012 elections.

Never mind that the bailouts were a use of taxpayer dollars not even within the initial scope of the constitutionally questionable TARP. Never mind that taxpayers are still a major shareholder in GM. And never mind that these bailouts have ingrained a “too big to fail” strategy among American businesses, who now feel entitled to federal funding should they fall short in the marketplace.

In reality, GM’s claim about paying back bailout money is misleading. Much of the $50 billion in federal assistance came in the form of equity purchases, with the government taking a 61-percent stake in the company. The cash loan totaled “only” $6.7 billion in taxpayer dollars. For taxpayers to recoup their investment, the federal government would have to sell its 365 million shares at a profit. The break-even price would be $55 a share, but GM is currently selling at $28.90.

And it doesn’t look like share prices are increasing any time soon. The stock market is up since mid-November by about 8 percent. But the stock of General Motors has bucked the trend. It’s down more than 16 percent since its initial public offering on November 18, 2010.

That’s the bad news—especially bad for the taxpayers, because it means we’ve lost roughly $11 billion in the government’s experiment in big business, with no real prospect that the market performance of GM will turn around anytime soon—not as long as the government is calling the shots, anyway.

There is no justification for sticking the taxpayers with the bill for this misadventure. The taxpayers didn’t want the bailout in the first place—every poll, not to mention the 2010 elections—confirms that view.

As things now stand, the taxpayers are innocent victims of the fraud that the bailout constituted from the beginning. Therefore, the only fair way to correct the injustice is to require General Motors to repay the taxpayers the $11 billion, or whatever the final amount turns out to be.

Since the automaker clearly doesn’t have that kind of cash lying around, one solution would be some type of long term debt financing. Such a settlement would not only be good for both the taxpayers and General Motors, it would also have the salutary effect of chilling the desire of any future big businesses from running to the government for a bailout.

The Washington Post got it exactly right when it wrote that, “The mere fact of government ownership is a drag on GM’s profit potential.” Consumers don’t want to buy from “Government Motors,” and top-notch executives don’t want to work for it. In addition, the bailout has brought unstable leadership: from its founding in 1923 until the government takeover in 2009, GM had a total of ten CEO’s, an average tenure of 8.6 years each. None of the three CEO’s since then has lasted even a year.

Worst of all, corporate leaders have been forced to base their decisions not on market considerations, but on the political/ideological prejudices of their government handlers. The Obama administration is ideologically committed to “green” development, and so GM has produced virtually unsalable hybrid Volts, which even at a non-competitive $41,000 lose money each and every one.

Read the rest at the link above...

True Cost of Fannie, Freddie Bailouts: $317 Billion, CBO Says

Please tell me that you aren't surprised by this. Nothing ever costs what obama claims. But that doesn't stop him and his gang of thugs from saying it anyway. Compulsive liars each and every one of them. But they have made this claim so often that many people believe it. Just like the costs associated with obamacare, they will be at least 10 times more than what we were sold, I use the term "we" very liberally, I was never sold on it...

By Matt Cover - CNSNews

The Congressional Budget Office (CBO) says the real cost of the federal government guaranteeing the business of failed mortgage giants Fannie Mae and Freddie Mac is $317 billion -- not the $130 billion normally claimed by the Obama administration.

In a report delivered to the House Budget Committee on June 2, the CBO said a “fair value” accounting of guaranteeing the two defunct mortgage companies – known as Government Sponsored Enterprises (GSEs) – was more than twice as high as the Office of Management and Budget had accounted for.

“Specifically, CBO treats the mortgages guaranteed each year by the two GSEs as new guarantee obligations of the federal government,” the CBO report said. “For those guarantees, CBO’s projections of budget outlays equal the estimated federal subsidies inherent in the commitments at the time they are made.”

“In contrast, the Administration’s Office of Management and Budget continues to treat Fannie Mae and Freddie Mac as nongovernmental entities for budgetary purposes, and thus outside the budget,” the report stated. “It records as outlays the amount of the net cash payments provided by the Treasury to the GSEs.”

The total of those cash payments is $130 billion, and is normally reported as the cost of the bailout of the GSEs to date. However, the CBO said that merely counting the cash payments, and not the cost of federal subsidies granted to the GSEs, obscures their real costs.

Essentially, the CBO is accounting for the cost of the federal government guaranteeing the loans bought and securitized by the GSEs.

Currently, Fannie and Freddie rely on explicit federal guarantees to continue to secure below-market financing rates. Because Fannie and Freddie are insolvent, the federal government must make up their losses when the loans they have guaranteed lose money in default.

However, the CBO counts not only the amount of federal funds spent to keep the GSEs operating but the cost to the federal government to subsidize the mortgage guarantees issued by Fannie and Freddie. In other words, the CBO counts as a federal spending commitment the subsidy given by the government to the GSEs.

The CBO calls this approach “fair-value” accounting because it treats the federal government’s actions just like the actions of any other market participant, taking into account the market risk of guaranteeing a mortgage.

Read the rest at the link above...