Well, not exactly, despite all the TV ads to the contrary. As near as I can figure out from the Forbes article, the numbers look like this:
Uncle Sam gives GM $49.5 billion: $6.7 billion loan @7% interest + balance as purchase of 60.8% equity in company.
Uncle Sam puts an additional $13.4 billion in GM’s escrow account during bankruptcy.
In my math-challenged mind, this means the taxpayers have forked over a total of $62.9 billion. (This does not include the $9.5 billion that Canada “invested.”)
So how much of that $62.9 billion has GM “repaid?” The initial $6.7 billion loan.
But … they need more money. Knowing that another bailout would be less than popular, they’ve applied to the DEC for a $10 billion loan – at 5% interest, 2% less than the loan they just “repaid.”
As Forbes so succinctly put it:
In short, GM is using government money to pay back government money to get more government money.
If you or I tried this, 1) we’d call it refinancing, and 2) we’d get arrested.
Reality Check:. Because a billion has nine zeroes here in Amerika, I’ve used the” billion” word like the government does. They do it to make it look like a smaller number. I did it because if I typed it out each time, this post would be too long. But here’s what it looks like just once: