I just read in USA Today the the feds have authorized billions more in taxpeyer money to GMAC to provide funds for them to make car loans.
Let me get this straight. The feds have given GMAC billions more of our tax money so that they can use it to make loans back to us to buy their products? Is it just me, or does something seem wrong with this picture?
Perhaps if the feds left that money in our pockets in the first place we’d be able to buy the cars that we now won’t be able to make the payments on?
I agree it’s NUTS…But one thing to remember GMAC also does Mortgages…and Business Loans…They’re basically a LARGE bank.
Agree it’s an upside-down world. Those highly paid people making those bad loans were all on commission. The’re still there, don’t have to give back any of their money and are spending your tax dollars to keep the company going. This is not even good socialism!
I guess my real point is that the feds are taking our money away to give to GMAC to loan back to us.
Yeah, upside-down it sure is.
GMAC is actually owned by Cerebus, Chrysler’s owner. Cerebus put Chrysler’s financing arm out of business and combined it with GMAC.
They should forgo this new bailout and just give everyone a check for $50,000, without the fear of having to pay it back. That way, people can use that money to pay for a new vehicle, pay off/down a mortgage, invest for retirement, play the lotto, go to Vegas, or whatever
The FED discount window was and still is wide open for banks to get “free money”, 0% interest loans. So funding GMAC is just an extension of this. People seem outraged by this, why?? Can you imagine where we would be had the government done NOTHING??? Our unemployment rate would be 40% today…
Mountainbike, since you are not a good citizen and are not financing a new car every two years, they have to compensate for that. So they gave the money directly to GMAC!!
I am of the mindset that a capitalist system should be one. This philosophy of what is too big to fail and stuff like that could spiral things towards a more chronic recession. I hope I am wrong.
Those highly paid people making those bad loans are only half the equation. How about the not so smart folks that took these “bad” loans? Personal responsibility is a lost attribute these days.
I can imagine what would have happened if the government had done nothing. We would be rid of a bunch of bad banks and said banks would not be sucking trillions of dollars out of the pockets of your great grandchildren. Ultimately, pumping forth this money has only delayed the pain that will one day come to our economy of bloated phantom dollar budgets. China is knocking, goodbye AAA credit rating, hello 20% interest rates…
Thanks for the chuckle Galant.
Yeah, me too. Perhaps I should have stated in my post that our taxes I thought were for national defense and necessary services. Apparently they feel free to use our tax money for whatever they feel, even of it’s to give to private conglomerates (by the billions and trillions) to loan back to us with interest to buy their products. We’re spinning out of control here.
Imagine if you will being a civics teacher trying to explain all this.
I Agree! My Complete List: National Defense, Federal Court System, And National Monuments.
CSA
Wrong…The ENTIRE Banking system would have collapsed. All the little local banks are supported by the big money center banks that were on the brink of failure. Your debit/credit card would suddenly become useless. Your paycheck impossible to cash. Our economy would have come to a halt. Our Government had NO CHOICE but to pump 1.7 Trillion into the banking system to prevent TOTAL COLLAPSE, not just the ten biggest banks but ALL THE BANKS. Yes, you are correct when you say 20% interest rates are coming. But that’s a GOOD THING not a bad thing. The days of financing our inflated lifestyles on credit are over. The debt can never be repaid by our grandchildren or anyone else. It will be “monetized”, the Bondholders paid off with freshly printed paper money. It’s the Chinese, Japanese, Saudis, Indians who will be left holding the big bag, not our grandchildren. Our grandchildren will have to go our and get real jobs, jobs that actually produce something, a refreshing change…
Docnick, aren’t you from Canada? Please state this directly when you comment on US matters or is your thinking geared to believing that Canada is the tail on the US dog?
I have lived and worked in 25 different countries, and have been able to observe what works and what does not in those countries.
Many things in the US work extremenly well, many other things work well in various other countries.
This forum is very educational for all of us to identify what might be improved by implementing things that work well elsewhere, such as healthcare in France and Sweden, manual skills education in Germany, lean manufacturing in Japan, and so on.
No one country has a hammerlock on all things good.
Agree; if you can’t afford that big house or that big car, and someone gives you a loan that allows you to buy it even if you can’t afford the payments later, that is irresponsible on the part of the buyer.
“Docnick, aren’t you from Canada?”
Docnick is an American - North American (at least for now). I’m an incurable includer…
Well, I have to admit that if they gave everyone a check for $50K, it would indeed stimulate the economy! You can start by sending mine! Foreclosures would be down, people would buy new cars, all businesses would benefit… for a while anyway. I don’t know if it would save GM or not, but all of the out of work employees would at least have something to live on for a year. Of course all of the idiots in the US would soon be penniless again, but that will always be the case, while most would put it to good use.
Health Care In France Works Well.
Why wouldn’t it when employees give up 22% of their paycheck for it? The government kicks in some more (where is the government getting this money?) Also, on top of that, just this past year, even with all that money, the health care system is $9,000,000,000 in-the-hole and citizens are being surcharged for certain presriptions and procedures. It may be starting to unravel, even at the huge cost to everybody.
This may be a good system for some, but I don’t want to live in the United States of France.
CSA
Healthcare costs are usually expressed as a percent of GDP; in countries with universal health care (complete coverage for everyone), they run about 50% of what Americans personally or their companies/government pay for health care. In Japan it is only 30%.
The problems the car companies are having with their legacy costs are expensive healthcare that was promised for their retirees, but they can’t deliver on.
This does not mean that governments should themselves be in the health care business; it indcates that governments should only set the overall quality level and budgets, much the way good businesses are run.