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View Full Version : GM paid back their Government Loan? Not so fast!!!



LLT
11-20-2010, 05:47 PM
I'm sure that we have all heard both politicians and GM executives talking about how the government bailout of GM was not only the "right" thing to do but that they are now justified in making that loan because GM has paid the loan back.

WRONG.

Do not pass go...do not collect $200.

I was just reading up on this very thing and found out something very interesting.

You see...we lent GM $49.5 billion last summer to keep them afloat. Only $6.7 billion was given as an unsecured loan...the rest was given to them through the purchase of approximately 61% percent equity in the company.

When GM and the present administration say that GM has paid back the bailout money in full, they do not mean the entire $49.5 billion of the unsecured loan and the equity...they mean the $6.7 billion loan amount.

But here is the kicker....GM is still no even breaking even yet...so how did they pay back this loan amount????

$13.4 billion of the original loan money was put into an escrow account....The company is now using a portion of the escrow account (government money).....to pay back the government loan.

...and now you know the rest of the story.

GitNoLuv
11-20-2010, 10:17 PM
I'd love to say I'm surprised...

GoSlash27
11-21-2010, 07:39 AM
I didn't hear anyone say that GM had paid back their bailout. Who said otherwise?