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Boost it!

White House Knew All Along That GMAC Would Need More Cash

Agent009 submitted on 10/29/2009 Official Bell & Ross Timestamp: 3:33:39 PM

16 user comments | Category: Misc News | Source: | SOURCE: www.detnews.com

A top White House economic adviser today defended the government's $80 billion bailout of the

075em solid darkgreen ! important; font-weight: normal ! important; font-size: 100% ! important; text-decoration: underline ! important; padding-bottom: 1px ! important; color: darkgreen ! important; background-color: transparent ! important; background-image: none; padding-top: 0pt; padding-right: 0pt; padding-left: 0pt;" href="http://www.detnews.com/article/20091029/AUTO01/910290486/1148/rss25#" target="_blank" itxtdid="13670054">auto industry and its plans to inject a third round of government capital into GMAC.

Christina Romer, chair of the Obama administration's Council of Economic Advisers, said the investments -- including $62 billion in aid for General Motors Co. and Chrysler Group LLC -- have been critical.

"The auto investments have been important for turning around an industry ... where a lot of jobs were at stake," Romer said during a roundtable meeting with reporters sponsored by the Christian Science Monitor.

She also said the Treasury Department's plan to invest up to $5.6 billion in GMAC had been in the works since May.


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White House Knew All Along That GMAC Would Need More Cash

About the Author

Agent009

"If everything seems under control, you're just not going fast enough."

— Agent009 (View Profile)


User Comments

veyron1001

And yet they gave GMAC money anyways?

— veyron1001 (View Profile)

Posted on 10/29/2009 4:15:40 PM | reply to this comment | Votes: -1   

Steve

I say close Government Motors down. Survival of the fittest, or the luckiest, makes sense. Reverse Darwinism, doesn't.

— Steve (View Profile)

Posted on 10/29/2009 4:34:48 PM | reply to this comment | Votes: -2   

indifferent

anyone know how much each saved job has cost the American taxpayer now?

— indifferent (View Profile)

Posted on 10/29/2009 7:31:15 PM | reply to this comment | Votes: -2   

DinamoR

stop crying douchebags. our economy just grew by 3,5%. Largest growth in 2 years.

How much would it cost if government spent nothing and it went down by 5% instead of growing by 3,5%? How about you tell us all how much that would have cost?

— DinamoR (View Profile)

Posted on 10/29/2009 7:37:22 PM | | Votes: -3   

Joe_Limon

Lets see... annual gdp of about 14.4 trillion, divide it by 4 for this last quarter gives us 3.6 trillion, 3.5% of that is... about 126billion increase in gdp for this past quarter. After spending how much? it's awefully close to $800 billion so far...

— Joe_Limon (View Profile)

Posted on 10/29/2009 7:54:48 PM | | Votes: 3   

DinamoR

I just threw out the 5% for comparison. who the hell knows how much the economy would have collapsed. Whe Herbert Hoover cut government spending in 1929, GDP went down by like 20%

— DinamoR (View Profile)

Posted on 10/29/2009 8:20:10 PM | | Votes: -2   

Steve

DinamoR said "stop crying douchebags. our economy just grew by 3,5%. Largest growth in 2 years."

It's a fool's paradise. Spending trillions of borrowed dollars, and amassing debt of cosmic proportions, in order to prop-up failing GigaCorporations. It is just building a huge house of cards. The "economic growth" you site not legitimate growth. It will sink horrendously when the hand-outs, and the borrowed money, come to an end.

— Steve (View Profile)

Posted on 10/29/2009 8:08:51 PM | reply to this comment | Votes: 5   

DinamoR

the "not legitimate" growth is what we had for ~6 years after Bush W. removed government regulation and let the markets run wild.

Debt is a huge problem, but we have to invest money to have a future. You don't worry about debt during a major economic disaster, you do what you have to to get the economy back up and running, and then you pay off the debt.

— DinamoR (View Profile)

Posted on 10/29/2009 8:21:45 PM | | Votes: -1   

Joe_Limon

DinamoR, if the market collapses so be it. The strong companies will survive, and the skilled will stay employed. I believe the USA needs another great depression. The country is bloated and uncompetitive in the global marketplace. Trim the fat and whip the country into shape and the USA will return to it's glory.

— Joe_Limon (View Profile)

Posted on 10/29/2009 8:30:15 PM | | Votes: 3   

DinamoR

are you crazy? you think what followed the 1929 collapse was a good thing?????

wow. ask someone who was alive back then. they'll tell you.

and all the financial indicators in second half of 2008 were actually WORSE than they were in 1929. we were heading for another great depression, and government spending saved us from it.

God, am I glad you clowns are not in charge right now. You just reminded me why I voted for Obama and why I will again in 2012.

— DinamoR (View Profile)

Posted on 10/29/2009 10:03:10 PM | | Votes: -2   

DinamoR

we can trim the fat down without a collapse. we just need to invest in infrastructure, energy independence and efficiency, health care reform and education. those 4 things is what will get USA back on top, not another great depression and people living on the street with 20% unemployment.

— DinamoR (View Profile)

Posted on 10/29/2009 10:04:45 PM | | Votes: -2   

Joe_Limon

Today is an entirely different situation then 1929. Today we have a lazy workforce that is overpaid and uncompetitive with the global marketplace. Financial indicators my ass, while they may have had some role, the drought and not rotating crops lead to massive crop failures as the land was overworked to the point of no yielding.

You have it stuck in your head that the more you spend the better off you will be. This only works in the short term, some would say short term gain for long term pain... The difference today is that there US is in debt and is competing with people willing to do twice as much work for a fraction of the cost. You cannot compare this to the great depression that way.

— Joe_Limon (View Profile)

Posted on 10/29/2009 11:16:47 PM | | Votes: 3   

Steve

DinamoR says "...you do what you have to to get the economy back up and running, and then you pay off the debt."

Talk to our friends in the Great White North, who started Deficit Spending, in a huge way, in the 1970s, and who are now burdened with unsavory high taxes in all forms: income, 13% retail, medical user feeds (in a "free" medicare system). Search beyond American borders to find countries that have done as you suggest, and have prospered.

Huge hand-outs to failing GigaCorporations is pure folly. Sound fiscal management is the key. And we, as a mass population, lack that. And our governments simply reflect our skewed beliefs and values.

— Steve (View Profile)

Posted on 10/29/2009 9:00:00 PM | reply to this comment | Votes: 2   

thetruth01

009, you are reporting the GMAC bailout as if it's another handout to GM. The two, as you well know, are separate entities. GMAC is a financial institution with its hands in a lot more than just GM financing. Whether you or others agree or not, the current and previous administrations have made it policy to prop up large failing financial institutions.

I hate corporate welfare. But as one who works with banks on a daily basis, I know the importance of keeping credit available. In my business, we have already seen a slight easing of the credit markets. This is great news. If C4C was partly responsible for the 3.5% growth this quarter, easing credit markets was certainly also a large part.

Financial institutions need to stay afloat. GMAC is no exception. You know this, but it is too easy to bash any more money going to them, and especially if you can lump it in with the general GM bailout bashing. That makes for better headlines.

— thetruth01 (View Profile)

Posted on 10/29/2009 9:45:00 PM | reply to this comment | Votes: 3   

Agent009

GMAC is the heart of GM and Chrysler financing for the dealers. They not only control auto loans to consumers, but also for the dealerships to purchase inventory.

So yes it is indeed part of the automotive scene. I knew they were in for trouble when they did the your job is your credit program and offered low interest loans to consumers with low credit scores.

There is a reason why most people have low credit scores...they tend to default more frequently. This bad debt is now a haunting issue.

— Agent009 (View Profile)

Posted on 10/30/2009 8:51:17 AM | | Votes: -1   

TheDepressingTruth

GMAC wants money from the government because it's easier (and Cheaper)than going into the markets to obtain money to loan out.

Also, don't go and "Kill the Fatted Calf" on the 3.5% growth last quarter...it's ALL SMOKE and MIRRORS thanks to Cash for Clunkers..

Oh and DinamoR? "...you do what you have to to get the economy back up and running, and then you pay off the debt."

No the "Debt" is going to be payed off by Devaluating the Dollar thru Hyper-Inflation. There is NO WAY that the Federal Debt (really over 100 TRILLION) can be paid back by "Stimulating the Economy"

— TheDepressingTruth (View Profile)

Posted on 10/30/2009 3:29:23 AM | reply to this comment | Votes: 1   

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