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posted: 10/9/2012 4:40 AM

GM bailout a bad bet for taxpayers

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In 2009 taxpayers invested $50 billion in GM. Federal government officials used the bankruptcy of the auto company to transfer money that belonged to debt holders such as pension funds and paid it to friendly labor unions. While labor unions have their role in the workplace, federal government favoritism toward unions has no place in a country so deeply in debt. In addition to exacerbating generational debt, the federal government greatly increased uncertainty about creditor rights under bankruptcy law.

Three years later while the labor unions and their membership prosper, us taxpayers still own 500,000 shares or 26.5 percent of GM, according to The Wall Street Journal. Now the auto company wants the government -- us taxpayers -- out of their business and offered to repurchase 200,000 shares while proposing the government sell the remaining shares held by us taxpayers through a public offering. The problem is we made a bad investment.

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To break even the price would need to be $53/share and the market is only willing to pay $24.14 a share as of Sept. 15. We, the taxpayers, would have to take a $15 billion loss that we couldn't even offset against anything on our tax returns.

How can the administration brag about saving the auto industry when it's turned out to be another bad investment for taxpayers? Who gained at our expense? Union jobs were saved at taxpayers expense is the hard truth.

Mike Tennis

Sleepy Hollow

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