[Hoot Gibson]

The column linked below is a few months old but the author does a nice job explaining why the notion that taxpayers are profiting from their "investments" in Chrysler and General Motors is nonsense. I have been looking at buying another car to use to carpool across town to work and I have pledged never to buy another car made by GM. (I have never owned, nor would I own any of the junk produced by Chrysler, with or without, a bailout.) I will not support socialism in my own country.[INDENT]

General Motors Will Never Repay Taxpayers
Obama's spin on GM's latest profit report is pure baloney

The Obama administration, and its media backers, have seized upon news that General Motors made a $3.2 billion profit in the first quarter of 2011 as proof positive that its auto bailout is a success. President Obama is so buoyed that he is reportedly planning to make the bailout a major part of his reelection campaign.

But by this standard, Charlie Sheen’s comedy tour ought to be declared a smash hit. Sheen’s backers will lose relatively less money on him than taxpayers will on the bailout.

No sooner had GM made its announcement than Washington Post columnist E.J. Dionne dashed off a stinging rebuke to naysayers (like me) who had dared doubt the wisdom of the bailout. Likewise, the auto czar Ron Bloom credited the turnaround to the president’s “tough love” approach.

No doubt, $3.2 billion is a big number. But an even bigger number is $60 billion. That’s what this administration and the last one together sank into GM (not to mention another $20 billion or so they dumped into Chrysler). When President Obama gave GM this money, he insisted that it was not a handout but an “investment” that would cost taxpayers “not a dime.”

But if there was ever any doubt that this wasn’t going to happen, this earning report dispels it.

For starters, included in the $3.2 billion figure is the net $1.5 billion that the company generated from the one-time sale of Delphi, its auto parts supplier, and Ally Financial, its financial arm. Subtract that, and its performance looks much less impressive, especially compared to its rival Ford that really didn’t receive a dime from taxpayers yet made $2.6 billion last quarter—or nearly a billion more than GM.

But cold, hard cash is not the only help that GM got. Usually when companies declare bankruptcy, their tax liabilities increase since they have no more losses to write off. But GM got Uncle Sam’s special bankruptcy package that allows it write off up to $45 billion of old losses going forward. That puts its total bailout at up to $75 billion*. Even that’s not all. The Treasury gave GM $10 billion of the $60 billion as a loan; the rest was through the purchase of equity. (It has more or less paid back the loan.)

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