PrintMay 6, 2009
Good news! Chrysler to stiff taxpayer for $7 billion
Well, it looks like that "bail out" money we gave Chrysler just became a "giveaway:"
Chris Isidore of CNN Money has the details:
Chrysler LLC will not repay U.S. taxpayers more than $7 billion in bailout money it received earlier this year and as part of its bankruptcy filing.This revelation was buried within Chrysler's bankruptcy filings last week and confirmed by the Obama administration Tuesday. The filings included a list of business assumptions from one of the company's key financial advisors in the bankruptcy case.
Some of the main assumptions listed by Robert Manzo of Capstone Advisory Group were that the Treasury would forgive a $4 billion bridge loan given to Chrysler in the closing days of the Bush administration, a $300 million fee on that loan, and the $3.2 billion in financing approved last week by the Obama administration to fund Chrysler's operations during bankruptcy.
An Obama administration official confirmed Tuesday that Chrysler won't be repaying the loans, though a portion of the bridge loan may be recovered by Treasury from the assets of Chrysler Financial, the former credit arm of the automaker which is essentially going out of business as part of the reorganization.
This will be the first of many, I'm afraid. Recall if you will the assurances we received that this bail out money would be paid back with interest. Recall also the laughter of serious economists who said the Obama administration was dreaming.
There are a couple of trillion bucks floating around out there that are at risk of simply disappearing. Do you think that Chrysler will be the exception rather than the rule? How much do you want to bet that the banks will look for similiar "forgiveness" from the taxpayer?
We have given considerably more to GM - almost $70 billion. Would they dare stiff the taxpayer when they file bankruptcy?
With these guys in charge? You're kidding, right?
