Government Motors Sold, Costing Taxpayers $10 Billion
Picture from Google Images – Government Motors
As libertarians we often say that anything the government touches it screws up. Unfortunately for the American Citizen, that screw up always costs more money. In a time where the economy is in shambles, people are out of a job and the government itself is way over budget, such screw ups should not happen. Yet, it did, once again.
This time around the government announced it was selling off the last of its stock that it was holding in General Motors. You remember that company right? It is the one that our government bailed out because it was going bankrupt during the beginning of the financial crisis. The government purchased a huge 67% percent or so of the company through the bailout, earning it the new moniker Government Motors.
Now I will have to admit, this particular bailout was not one of the worse the government made. The government did sell off its stock as announced, to the tune of a $10 Billion loss. Yes, you read that correctly, it cost us, the taxpayers; $10 Billion dollars to save GM. What did you get for your share of that $10 Billion?
If we take the time to look at the really big picture of government, where they drop checks of billions of dollars all the time, this could be viewed as one of the smaller losses. However, it now sets the pace for far greater future losses. You see, with this bailout, there is now a precedent that was set. That precedent is now widely known in the business community.
If you have a strong enough lobby in Washington or you are very important to the politicians (like huge campaign funds), then you do not have to worry so much about whether your business will succeed in the market place or not because you can always turn to your friends in D.C.
Supposedly 2.6 million or so jobs were saved by the government intervention. Somehow, I do not see that as being a thing to consider. Many companies go out of business all the time. The have huge payrolls. What happens to those people? Well, the competitors usually swoop in and buy up assets and hire laid off workers. It does NOT take the government interfering in the free market place to make that happen.
When Motorola, Inc. laid off nearly everyone working on the iDEN phones in Ft. Lauderdale, Research In Motion (Blackberry) did exactly that. They came down, held interviews and hired hundreds of ex-Motorolans. The same thing would have happened with GM. If GM went into bankruptcy, Ford or Honda or some other car company would have dived in, bought out the assets and hired the people.
Government did not have to bail out the company. Employees would have found jobs in other car companies or other sectors of the automotive industry. There would not have been a loss of 2.6 million jobs as portrayed by the government. They would have found jobs with companies that did not need the government to survive. Any “lost” jobs would sooner or later, returned over time, as they always do.
But no, instead of letting the market place handle what it was designed to do, the government interfered. In their infinite wisdom, the government decided what was best. Unfortunately for the taxpayer, that decision was not based on what was best for the country, but, what was best for the politically connected.
That trend continues to this day. It is not about to stop any time soon because We The People still do not hold our government officials accountable. Where do you think the next big problem is going to come from and require another government handout? If you guessed the insurance companies and health industries you might be right.
You see, with the new law, it requires that young and healthy people join the pools in order to reduce the cost of the otherwise aging population. However, the young do not want anything to do with the new law or the new exchanges. When these people opt out of participating what do you think will happen to the prices and whom do you think well be stuck paying for it?
The precedent is already set; want to take bets on what is going to happen?
Source: Libertarianviewpoint.com
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