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GM Repays TARP Money...With Other TARP Money

By Da King Published: April 23, 2010

A couple days ago, General Motors and the Obama administration (which are the same thing now) touted GM's repayment of it's bailout money:

" This is the new pace of GM today. GM's ability to pay back the loans ahead of schedule is a sign that our plan is working." - GM Chief Executive Ed Whitaker, hand-picked for the job by President Obama.

"What a difference a year makes. Just about a year ago, the American auto industry was on the brink of collapse. Today, General Motors announced that it has repaid its $6.7 billion loan to the U.S. government in full five years ahead of schedule." - White House economic advisor Larry Summers

"We are encouraged that GM has repaid its debt well ahead of schedule and confident that the company is on a strong path to viability." - US Treasury Secretary Timothy Geithner

Everything's coming up roses, eh ?

Not so fast. As it turns out, GM paid down it's TARP loan with...other TARP money. Here's Senator Tom Carper (D-Del) questioning Neil Barofsky, the overseer of TARP bailout funds:

It’s good news in that they’re reducing their debt,” Barofsky said of the accelerated GM payments, “but they’re doing it by taking other available TARP money.”…

“It sounds like it’s kind of like taking money out of one pocket and putting in the other,” said Carper, who got a nod of agreement from Barofsky.

The way that payment is going to be made is by drawing down on an equity facility of other TARP money.”

So, GM didn't really payoff it's debt, it merely shuffled TARP funds around and pretended it had repaid it's bailout funds. Not to mention the fact that GM was bailed out to the tune of $50 BILLION. The $6.7 billion fictitious repayment is only a fraction of that. Most of the money was used to give the U.S. government a 60% shareholder stake in Government Motors, er, I mean General Motors.

Is it troublesome that the Obama administration, GM, and the Treasury Deparment are lying about this ? Or have we become accustomed to such dishonest behavior from an administration that is elevating it's creepy factor practically by the day ? Has anyone else noticed that this government is ALL ABOUT GOVERNMENT CONTROL AND EXPANSION ? It seems nearly every move this administration makes is designed to increase that control.

Sen. Chuck Grassley (R-Iowa) sent a letter to Geithner yesterday, blasting the Obama administration for it's political shell game. In that letter, Grassley may have uncovered the reason for the dishonesty of GM and the Obama administration, as follows:

Following the April 20, 2010, hearing of the Senate Finance Committee, where Treasury’s decision to exempt GM from the bank TARP excise tax was questioned and GM’s refusal to testify was noted, it is odd that GM suddenly drew down on the TARP escrow and accelerated the repayment of the remaining balance of GM’s outstanding TARP loans.

You see, in the Obama administration, you are either a) one of the privileged "good" guys entitled to special treatment, or you are b) one of the "bad" guys to be demonized and punished. The designation of "good" or "bad" depends on whether you support Obama or not. It reeks of cronyism, and it's all very....Chicago-like, which is where Obama and most of his inner circle come from.

Hope and change, suckers.

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