GM Loan Paid Back? Not Really.

Well, OK, they paid back the part of their bailout that had the word “loan” in it. But they paid it back with other taxpayer money, not with money from business operations. What a bunch of liars. But it’s Government Motors now; what should we have expected?

Uncle Sam gave GM $49.5 billion last summer in aid to finance its bankruptcy. (If it hadn't, the company, which couldn't raise this kind of money from private lenders, would have been forced into liquidation, its assets sold for scrap.) So when Mr. Whitacre publishes a column with the headline, “The GM Bailout: Paid Back in Full,” most ordinary mortals unfamiliar with bailout minutia would assume that he is alluding to the entire $49.5 billion. That, however, is far from the case.

Because a loan of such a huge amount would have been politically controversial, the Obama administration handed GM only $6.7 billion as a pure loan. …

…

As it turns out, the Obama administration put $13.4 billion of the aid money as “working capital” in an escrow account when the company was in bankruptcy. The company is using this escrow money–government money–to pay back the government loan.

via Still Government Motors.

More links:

Like Shifting Your Credit Card Balance To Another Card

Lawmakers Accuse GM, Administration of Misleading Public Over Loan Repayment

Fun with Numbers: GM ‘Payback’ of Taxpayer Loans

UPDATE (Mon 303 May 2010): Another link: NYT: GM, Treasury lied about bailout repayment