Still Government Motors - Shikha DalmiaRecoil from the word “stimulus” — whether used by a Republican or Democratic administration. There is no such thing as an easy, fuzzy notion of instant money creating economic growth. Instead it is a euphemism not for borrowing, but for massive borrowing and unsustainable debt. Indeed, note that we do not even use words like “borrowing” or “debt,” but instead prefer “deficit” (e.g., It’s only a year-to-year thing) and “stimulus” (e.g., spending what we don’t have somehow makes us richer in the future).
“Stimulus” is thus a lie as it is used, or at best a half-truth.
The truth — even if right now we were to go ahead with a return to the Clinton tax tables, raise the caps on income subject to Social Security taxes, have the states keep increasing their sales and income taxes, and apply new Obama surcharges on health care — is that we are still going broke.
Do the math: $12 trillion is a lot of debt ($40,000 for each of us, $200,000 for a family of five starting out in the world — like a second home mortgage in other words). Twenty trillion dollars in just eight more years is doom (like two family vacation homes to pay for without the vacation homes to vacation to).
But when Mr. Whitacre says GM has paid back the bailout money in full, he means not the entire $49.5 billion--the loan and the equity. In fact, he avoids all mention of that figure in his column. He means only the $6.7 billion loan amount.
But wait! Even that's not the full story given that GM, which has not yet broken even, much less turned a profit, can't pay even this puny amount from its own earnings.
So how is it paying it?
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.
