- The Washington Times - Friday, May 30, 2014

General Motors may have bounced back from its 2009 bankruptcy to take a top spot on the list of most profitable companies in the world, claiming $22.6 billion in earnings in its most recent filings. But taxpayers who funded the company’s bailout probably aren’t as cheerful.

Taxpayers are still out $10.6 billion. The U.S. Treasury Department shut the books on the $49.5 billion bailout late last year — meaning, in the eyes of the federal government, GM’s bailout debt is paid in full, CNN Money reported.

Why are taxpayers so short?

The terms of the bailout were for the United States to purchase GM stock, rather than issue an outright loan. That way, the company wouldn’t have to claim more debt. But unfortunately for taxpayers, GM’s stock has never risen enough for Treasury to get back its so-called investment. So taxpayers are left holding the short end of the stick.

Treasury officials defended their $10.6 billion stock loss.

“Our goal was never to make a profit but to stabilize the auto industry,” said one Treasury official, asking for anonymity, CNN Money reported. “By any measure, we succeeded.”

GM lists as one of the 40 companies around the world that are considered most profitable. Some critics of the bailout program say GM should still have to pay back its bailout money.

“We’re certainly glad they’re making a profit now, but it would have been nice if there had been clawback provisions to make taxpayers whole,” said Scott Hagerstrom, the Michigan state director of Americans for Prosperity, CNN Money reported.



Click to Read More

Click to Hide