GM & Chrysler Bankruptcy

G.M., Leaking Cash, Faces Bigger Chance of Bankruptcy

Even after receiving $15.4 billion in federal loans, General Motors is once again on the brink of financial collapse.

The automaker’s first-quarter earnings released Thursday showed that G.M. was losing more money and sales than it was in late December, when the government began its bailout…………..

This is occurring as Chrysler is in Bankruptcy

Chrysler Files to Seek Bankruptcy Protection

President Obama forced Chrysler into federal bankruptcy protection on Thursday so it could pursue a lifesaving alliance with the Italian automaker Fiat, in yet another extraordinary intervention into private industry by the federal government.
Flanked by his automobile task force of cabinet secretaries and business advisers in the White House’s grand entranceway, Mr. Obama announced a plan that would allow the United Automobile Workers, through their retirement plan, to take control of Chrysler, with Fiat and the United States as junior partners. The government would lend about $8 billion more to the company, on top of the $4 billion it had already provided……

If this is the good things that comes out of companies being to big to fail and then being supported by a federal government which is to big to fail.

This just proves that the US federal government is to bg and needs to be dismantled and let the states try to run things since the feds have screwed things up so badly.

GM will move jobs out of US using Taxpayer Money

This is our wonderfully brilliant central government planning that was started by Bush and is being completed by Obama.

Under Restructuring, GM To Build More Cars Overseas

The U.S. government is pouring billions into General Motors in hopes of reviving the domestic economy, but when the automaker completes its restructuring plan, many of the company’s new jobs will be filled by workers overseas.

According to an outline the company has been sharing privately with Washington legislators, the number of cars that GM sells in the United States and builds in Mexico, China and South Korea will roughly double.

The proportion of GM cars sold domestically and manufactured in those low-wage countries will rise from 15 percent to 23 percent over the next five years, according to the figures contained in a 12-page presentation offered to lawmakers in response to their questions about overseas production.
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Everyone needs to call their congressman (woman) and tell them thanks for letting the executive branch of the federal government spend out tax dollars to send jobs out of this country.

Just the normal expected result of the government helping out.

1st 100 Days & the future failure of America

I thought after the 1st 50 days that things could only get better, lots of new people making new people mistakes, these people really have pride in America just not reacting to well to the new power and environment.

It has just gotten worse except for the distraction game, the Obama administration has gotten very, very good at distraction while the real agenda of the government take over of a majority of American business marches forward.

Some of the highlights/lowlights
1) The American Apology tour through Europe. I thought only look at how important I am, self-indulgent Hollywood types (Penn, Glover, Bellafonte) and ex-presidents (Carter) went around the world saying America is evil. Now the sitting president is apologizing to the world because American Capitalism over the last century and a half has brought an improved standard of living to a large segment of the world population.

2) Cut 100 million dollars from federal budget, same as a family making $45000 a year taking a $1.22 annual pay cut. I wonder what will be cut in the family budget to make up for the income loss, need to drink water instead of the bottle of soda at today’s lunch. savings achieved, no more cutting needed.

3) Media lapdog to the president – ignores hundreds of thousands of protesters who think that government is overstepping its bounds and government intervention into private society needs to be curtailed.

4) Continue to ignore friends and prop up enemies. (Iran, Cuba, Venezuela, North Korea) And listen to them speak while they rant about how evil America is.

5) Politicize the security of America by releasing CIA memos

All of these are a distraction as they push through a universal health insurance and energy cap and trade plan.

Universal health care will result in limiting access, it is the only way to decrease costs is to limit access. See Charles Krauthammer collumn. The government has convinced a majority of the people that the America Health Care industry is broken and can only be “fixed” by the federal government.

The federal government is going to do the same thing with the energy industry under Cap & Trade. Cap & Trade will result in significant 300 to 400% increases in energy prices which will raise the prices for each American household about $3900 dollars more a year. This will result in American’s becoming enraged against energy companies and utilities giving the government the support to price cap and nationalize the energy industry. This will result in less energy for everyone to use.

It is called hidden taxes on business which gives those in power the ability to create a crisis and then solve the crisis by taking more power.

America is on a road to rapid failure and lower standards of living for the good of everyone.

POWER CORRUPTS, ABSOLUTE POWER CORRUPT ABSOLUTELY!!!!!!!!!!

Obama Runs General Motors

This is such a terrible precedent but what does a private business expect when it looks to government to help.

GM Chief to Resign at White House’s Behest

The Obama administration has forced the longtime head of General Motors to resign and said yesterday that it would withhold additional federal aid to the auto industry unless the ailing companies undertake changes they so far have been unwilling or unable to make.

As badly as GM has been run over the last 30 years this is a horrendous event for those of us who want a limited government. As I have stated before GM should have gone into bankruptcy protection to change its long term prospect for success.

This is a sad day in America and is the culmination of decades of effort by communist/socialists to destroy the free markers. Welcome to the inefficient government run unionized auto company that will cost tax payers untold trillions of dollars.

Welcome to the Socialist States of America dominated by a strong federal government, week state and local governments, the end of personnel liberty which is exactly the opposite of the principals on which America was founded.

Good-Bye Capitalism, welcome socialism comrade.

Saturday’s cartoons – politics

from townhall.com

Why Universal Health Insurance will be reality in 2009

This is a very simple reason if people would pay attention. A union-run health care trust known as a voluntary employee benefit association, or VEBA is what it is called. Starting in 2009 the UAW will need to pay for the retiree health insurance instead of GM, Ford, Chrysler. This means the union is actually responsible for a tangible service for the union members. Since the auto industry has all but failed the companies are not putting the money aside the contract says is required.

Read about it here and here and here.

Under the 2007 contract, the Big Three and the UAW agreed to the following:
* To transfer, starting in 2010, retiree health care obligations to a Voluntary Employee Benefits Association (VEBA) run by the UAW. The automakers agreed to collectively pay $60 billion into the VEBA, after which time the UAW would have full responsibility for providing retiree health benefits. This agreement takes the cost of providing health benefits off the Big Three’s balance sheets.

The unions must have at a minimum government paid universal retiree health insurance by Jan 1, 2010 so that they can’t be held responsible for people losing their health insurance.

If GM, Ford & Chrysler can live through 2009 since the removal of this huge cost from the car production overhead costs will remove one hurdle to the chance for profitability.

The only reason that the union leaders would make any “concessions” on this topic for underfunding is if they have been assured by the democrats they will never have to fund this anyway. Obama, Pelosi & Reid are so deep into the union pockets that they will put through a universal health insurance law in 2009 so that the retired union members will not get upset when the benefits are lost. Even if the big 3 only fund half of the $60 billion, the unions will get to keep this money since they will not have to spend it on the intended purpose because the rest of the taxpayers will pay for this. I wonder which party will get campaign funds from this pot of union money.

US Government spending will bankrupt the world

The US federal government is in the process of bankrupting the world as accounting practices that the federal government does not allow private companies to use are used to hide the real government debt. This cuts across party lines and the end of liberty and personnel freedom in the world.

The total economic of the world based on the ponzi scheme known as government spending is close (if not already beyond) the tipping point. Paper currency will be virtually worthless since the governments that print them have no possible way to back their value.

Government spending is the problem and drastic government spending cuts (real cuts not decreasing the rate of increase) of 50 to 90+% in some cases are required.

Federal obligations exceed world GDP, Does $65.5 trillion terrify anyone yet?

As the Obama administration pushes through Congress its $800 billion deficit-spending economic stimulus plan, the American public is largely unaware that the true deficit of the federal government already is measured in trillions of dollars, and in fact its $65.5 trillion in total obligations exceeds the gross domestic product of the world.

The total U.S. obligations, including Social Security and Medicare benefits to be paid in the future, effectively have placed the U.S. government in bankruptcy, even before new continuing social welfare obligation embedded in the massive spending plan are taken into account.

The real 2008 federal budget deficit was $5.1 trillion, not the $455 billion previously reported by the Congressional Budget Office, according to the “2008 Financial Report of the United States Government” as released by the U.S. Department of Treasury
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“The federal government is bankrupt,” Williams told WND. “In a post-Enron world, if the federal government were a corporation such as General Motors, the president and senior Treasury officers would be in federal penitentiary.”

Assuming 330 million Americans, 65.6 trillion debt is equal to $198,484 per American. This is on top of any state, local or personnel debt.

If you want to really understand the what the future holds and the consequences read the A Citizen’s Guide published by the treasury department.
It would be nice if government would live by this motto in the report.

Using the government accounting methods that if any private business used, the CEO, CFO and board of directors would be in jail, here are some tables from the report on future predictions.

These projects do not take into account the money spent since Oct 1, 2008. TARP and the new stimulus plan are on top of this staggering debt.

Americans need to hold our employees the elected government officials responsible. New blood is needed.

The “almost” stimulus plan

I have been reading a lot about the close to $1 trillion dollar stimulus plan and the only conclusion I can come to is that the federal government is going to add about $1 trillion dollars to the national debt.

The basic of what America gets is to give a batch of IOUs to China and other countries or maybe they are IOUs between the FED and the Treasury. State and local governments which have been spending like there is no tomorrow the last 6 years due to the vast increase in tax revenues due to the ever growing economy now have no money since tax receipts are down due to the normal cyclical economic recessions which always occur. America’s politicians at every level of government in the kindest way I can say it are failures.

The Obama and the Congressional democrats plan are going to bail out the failed state and local governments who are doing just as bad a job as the federal government does when it comes to living within the countries means. This is a “stimulus” plan which will all the politicians at every level of government kick the problem down the road a few years and not have to make any difficult decisions on what programs should really be cut or eliminated.

I guess since the federal government is now rewarding failures in private businesses (mortgage underwriters (Freddie and Fannie, banks, insurance and auto companies) why not underwrite the state and local government failures. Some state and local governments (not all, but lots) are failing due to the federal government mandates which is just like the onerous regulations on the private companies which results in their failures.

Since the elected federal and unelected bureaucracies have caused a vast majority of the problems, I guess the federal government needs to cover their butts before the truth is really know.

The stimulus plan is really a list of who’s who in democratic party lobbyists and financial contributors as well as the state governors and local government leaders.

I say kill the plan, my wife and I will continue to pay our bills and live on what we make today, keep the $20 a week that will be the “stimulus” I see. The $20 a week will cost me up to $100 a week in extra state and local taxes and fees to pay for the matching funds which the state and local governments will have to raise in order to spend the federal government stimulus plan.

From Townhall.com

TARP = Socialism

Government to Pick Winners and Losers

I would like someone to point to the area of the constitution which allows the US government to pick which businesses succeed and fail in the American Economy.

Treasury Opens Door to Aid for Broad Array of Firms, Industries

‘Constructively Ambiguous’

Treasury officials “much prefer discretion, and so they would view the statement as being constructively ambiguous,” Reinhart said. “It’s appropriate that they end the year the way they spent most of it — that is, adding uncertainty into an environment in which there’s a lot of uncertainty.”

The guidelines don’t bind the government, so the lack of specifics gives President-elect Barack Obama plenty of leeway to decide who succeeds and fails when he takes office in three weeks. The bailout was originally designed to buy assets from banks and has instead become a fund for Treasury to prop up lenders, insurers, carmakers, auto-finance companies and, now, any firm that may be important to those industries.

Slippery Slope

“The further you go, the slipperier the slope becomes, the more you open the door to anyone who says, ‘Look, my firm is in trouble, I need help too,’” said Lyle Gramley, a former Fed governor and now a Washington-based senior economic adviser for Stanford Group Co. “We don’t want to go any further down that road than we absolutely have to.”

In America we do not elect gods or omnipotent beings. These appointed bureaucrats of the elected officials are a joke. I love how things things are always announced on a Sunday night or a holiday night when the media and most people are not paying attention.

Where is the openness and direct communication, where is the honesty. The founders who fought against a strong central government were 100% correct, centralized power will destroy freedom and liberty.

America has now voted itself into socialism just like Venezuela, I hope the power outages, oil refinery problems, food shortages and coffee shortages.

This is the result of government officials picking and choosing winners and losers in business.

We all need to take a page from Ronald Reagan.
From his 1st Inaugural address

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You and I, as individuals, can, by borrowing, live beyond our means, but for only a limited period of time. Why, then, should we think that collectively, as a nation, we’re not bound by that same limitation?
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In this present crisis, government is not the solution to our problem; government is the problem. From time to time we’ve been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people. Well, if no one among us is capable of governing himself, then who among us has the capacity to govern someone else? All of us together, in and out of government, must bear the burden. The solutions we seek must be equitable, with no one group singled out to pay a higher price.
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Another great Reagan Quote

The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.’
Ronald Reagan

GMAC Bailout – borrow, spend, repeat until debt free

Nice to know that a private company can convert to a bank holding company under its own rules and get taxpayer money.
GMAC gets help

GMAC has been trying to raise capital after the Federal Reserve said last week that it would approve GMAC’s conversion to a bank holding company. The Fed usually requires banks to have $30 billion of capital on hand, but it made a special exception for GMAC, as the government considers the company critical to the recovery of the U.S. auto industry.

The company is trying to recover from $7.9 billion of losses in the previous five quarters, most of which came from risky subprime mortgage bets made by ResCap. It got some help Monday night when the Treasury Department invested $6 billion in the company through the Troubled Asset Relief Program.

Partially owned by Chrysler parent Cerberus and also by General Motors (GM, Fortune 500), GMAC did not release details of how much capital it has raised to date. It previously said it would need 75% of bond holders to change their stakes to equity holdings to reach the $30 billion plateau.

I guess rules are only rules as long as they are convenient, as soon as they are not convenient the rules can be changed to whatever King Paulson says is OK.

Of course, GMAC will pay the “loan” back to the taxpayer with interest. GMAC is going to loan the money out and I am sure that the interest GMAC will charge will cover the interest owned on the loan to the taxpayer. HAHA. As noted in this article.
GMAC loosens credit to make vehicles easier to buy

Detroit-based GM said it was offering zero-percent or low-interest financing on some slower-selling 2008 and 2009 models over the next week — a promotion made possible by the billions provided to GMAC.

The economic solution to people not paying off loans, loan more money to higher risk people at 0%, that will make a bank financially viable.

Someone wake me up when the sanity starts