Wednesday, May 06, 2009

Chrysler Owes U.S. Tax Payers 350,000 Cars---That You'll Never Drive

In filing for bankruptcy, Chrysler will be able to avoid paying back a $7 billion bailout debt owed to US taxpayers. You can read a segment of an article examining the topic below, or read the full post here.

You know when the sentence begins with the words, "This revelation was buried within Chrysler's bankruptcy filings," it can't be good news.

And it certainly is not good news for the Obama administration or for Chrysler.

CNN is reporting that, "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."

The story goes on to detail how Chrysler recent bankruptcy was structured, and I fear you can probably guess the rest.

The rest being that a deal that was struck in some back rooms in Washington leaving the U.S. tax payer with pretty much nothing to show for the $7 billion bailout given to Chrysler so far.

"The reality now is that the face value [of the $4 billion bridge loan] will be written off in the bankruptcy process," said the official, who added that the 8% equity stake that Treasury will be receiving as part of the company's reorganization is meant to compensate taxpayers for the lost money," CNN goes on to report.

If you do the math, and as a journalist I must confess that I'm really bad at math, you'll eventually arrive at the number 350,000.

That's the number of Chrysler cars the Federal government could have purchased with $7 billion dollars---if you consider that each car costs $20,000.

It is hard not to wonder what 350,000 more car sales would have meant to Chrysler's business had the Fed decided to use the money to buy cars instead of underwrite questionable---no make that---bad loans.

It might have meant that Chrysler would not be in bankruptcy as 350,000 car sales would have represented a serious boost to its bottom line.

It probably would have have meant that President Obama would now be answering fun questions about that brand new orange Challenger sitting in the White House garage, instead of hard questions about why exactly his task force struck a backroom deal that lost tax payers billions, and why the details of that deal were, "buried within Chrysler's bankruptcy filings" and not discussed openly and publicly.

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