Quote:
Originally Posted by ALLT4
I get exactly what you're saying and can't figure out why others can't see it. GM needs to initially buy back the stock the from the taxpayers. THEN sell it to investors. Selling stock to the taxpayers twice is getting a free ride and pretty much loan forgiveness.
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In college, one of my friends helped me wire my aftermarket sound system in my Cobalt. I paid him in beer. Should I have asked for money for the beer then paid him an hourly wage for his labor?
What I'm saying is that the government opted to barter payment rather than accept cash. This decision was based on the belief that GM's value will rise enough to exceed the likely interest of any loan. Notice that the government took a much smaller portion of Chrysler, a company plagued with uncompetitive or otherwise bland products. It is the government's belief that this company, Chrysler, will be less likely to generate a valuable return when the government sells its stock. GM, however, has a competitive product line that looks more likely to bring success and money. The government wants to protect taxpayer money by making the most out of its investment. This has all been planned very carefully.