Quote:
Originally Posted by The_Blur
 It amazes me how thoroughly uninformed some people are about the world around them. Bailouts don't get paid back. Loans do. This is a loan. |
Well your theory is sound, however in practice it almost never works this way. These loans invariably turn into bailouts. This is because GM will simply default. Then the government is in the position of having to force GM into bankruptcy to pay the 'loan' which was granted to keep GM from filing bankruptcy- see the catch-22? It's an uncallable financial instrument. An uncallable financial instrument is called a 'gift'. In fact, the entire 700b dollar package that was supposed to buy bad assets was just changed into a plan to get more loans into the market. This includes unsecured credit card debt (heavily, actually). It just got turned into an ad hoc stimulus through increased credit package.
I don't want to go ad hominem on you Blur (and others), but I don't think you've been paying attention to the way the finance system interacts with government.