Fudging The Numbers

Yesterday the Daily Caller posted an article listing some of the facts in the bailout of General Motors that seem to have been overlooked in the President’s claim to have saved the company.

The article reports:

Car dealerships’ lots are filling up with unsold trucks and SUVs because GM built more vehicles than it can sell in order to inflate sales claims and artificially boost its profits, The Daily Caller has learned.

The Detroit automotive giant records sales for vehicles in dealers’ inventories before car buyers make their purchases, said Mark Modica, a National Legal and Policy Center associate fellow.

Obviously the fake sales numbers will be revealed at some point in the future when the cars are still sitting on the dealers’ lots. The truth will conveniently not be revealed until after the November election.

The article further reports:

Third quarter results won’t be made public until after the November election, allowing Obama to tout the company’s short-term success while masking troubles that are not yet apparent to voters.

Here we have another reason voters need to pay attention.

The article concludes:

“The question is if [GM] is viable enough to ever repay taxpayers,” Dalmia said. “It’s pretty clear that taxpayers aren’t ever going to be repaid.”

Rep. Kelly, the Pennsylvania car dealer, predicted an economic resurgence that would impact the auto sector if Mitt Romney becomes president.

“If Governor Romney is elected,” he said, “you’ll see reinvestment, you’ll see people come back to this economy.”

Please follow the link above to read the entire article. The comments are also very interesting. One commenter reminds us that in the process of taking over General Motors the government took away 20,000 pensions from non-union Delphi workers. One of the basic aspects of the General Motors and Chrysler arrangements worked out by the government was the transfer of large amounts of money to the unions. That needs to be mentioned when the President claims he saved the auto industry (which he will) during any debate that takes place.



Why We Shouldn’t Let The Government Invest Our Money

1964 Oldsmobile Starfire

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On November 14, the Detroit News reported that American taxpayers will lose $23.6 billion, up from its previous estimate of $14.33 billion, on the bailout of General Motors.

The article reports:

The Treasury now pegs the cost of the bailout of GM, Chrysler Group LLC and the auto finance companies at $79.6 billion. It no longer includes $5 billion it set aside to guarantee payments to auto suppliers in 2009.

The article goes on the chronicle the losses in the government bailout programs in various sectors of the economy.

The article reports:

The new estimate also hikes the overall cost of the $700 billion Troubled Asset Relief Program costs to taxpayers. TARP is the emergency program approved by Congress in late 2008 at the height of the financial crisis.

In total, the government used $425 billion to bailout banks, insurance companies and automakers, and provided $45 billion in housing program assistance.

The government now expects to lose $57.33 billion, including the full cost of the housing program, up from $36.7 billion. The new estimate means the government doesn’t believe it will make an overall profit on its bailouts.

Again, the problem is that we are spending too much, not that we are taxed too little.

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