• Jun 8, 2009
The bankruptcy of General Motors and Chrysler has made both automakers part property of the U.S. government. Under the current plan drawn up by President Obama's Auto Task Force, 60 of Chrysler will end up under the ownership of Uncle Sam, but Republicans are hatching a different plan. Senator Lamar Alexander, R-Tenn., has authored a bill to turn over control of the Detroit automakers to the 140 million Americans that filed tax returns last year. The stock notes would be doled out once GM and Chrysler exit chapter 11 bankruptcy.

CNN Money quoted Senator Alexander as saying his bill was "the fastest way to get the stock out of the hands of Washington and back into the hands of the American people who paid for it." The bill has the support of three other Republican senators, and many others on the right have voiced their disapproval over government ownership in the automotive sector. Alexander feels his bill would prevent government intervention in day-to-day business, while quickly returning the companies to the marketplace.

[Source: CNN Money]


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      • 5 Years Ago
      At first, I thought, "what a great idea", then I thought, "we each wouldn't get much stock anyway", and then I thought, "if it's not much more than a few shares then why are we so upset about the tax money that was spent"? I know it's a matter of principle, but then, more money gets wasted on so many other things and we are less outraged. Instead, we should get shares in all the banks that received TARP money! Then we could get credit more easily, (one would think).

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        • 5 Years Ago
        50 billion dollars divided by 160 million taxpayers is about $313 per person, if everyone payed an equal portion. If we are going by the current price of $2.78 GM is trading at now, each person would get about 113 shares.
      • 5 Years Ago
      Is this in lieu of some other money? Because if not and it is just a free handout.

      It does nothing to get any actual recovery of the money put into GM.

      The government is taking stock in hopes of eventually recovering some of the money put it. To give away the stock might appease some people with a handout, but it doesn't recover any money.

      In short this is nothing but some kind of tax cut scheme where the tax cut is retroactive and paid in GM stock. Following GOP philosophy that the solution to every problem is a tax cut. AKA nuts.
        • 5 Years Ago
        dang it, you beat me by 1 minute! :P
      • 5 Years Ago
      This is great. But those few who get the Tax payer paid for car stocks, should have to pay the other tax payers the actual tax payer cost of attaining those stocks... not the current market value.
      • 5 Years Ago
      Thanks, but no thanks. By the time the politicians got the shares distrubited it would cost the taxpayers more than the loans, 38 hearings on the matter, and another branch of government added, then to the supreme court.
      • 5 Years Ago
      lol, so how many shares do we get under this plan?
        • 5 Years Ago
        You'll get 1 share per auto company, but when you cash it in, you'll have to pay a 4000% capital gains tax or $10,000, whichever is higher. That way the tax payer is still getting screwed.
        • 5 Years Ago
        Well, this is where it gets funny - we do the math based on number of taxpayers divided by the bailout amount. In fact, since we have a tiered tax system, some people have spent more on the bailout than others...maybe that top 1% should get more shares back. Wait, what? Who said that? (steps back into the darkness).
      • 5 Years Ago
      Please no. Most people have no idea what stock is, what it represents, or what you are supposed to do with it. Depending on how much GM stock they convert out of their equity when this happens, it ends up being something like a $100-$200 tax break. -- Except with SO much more complication than cash.

      Tens of millions of people will have to pay a $10 brokerage fee to cash out (which I'm sure so many millions of people would immediately do). On such a small amount, that's like a 10% charge. Furthermore, a good chunk of this free stock would just sit there forever because so many people wouldn't even be aware that it is there (for instance, my grandma would just put the paper on her stack and her free stock would be lost into oblivion). I'm sure tons of scammers would immediately pop up to harvest people who have no idea what is going on: Did you know you have FREE MONEY FROM THE GOVERNMENT? Call 888-22-MONEY for information how you can receive your guaranteed $150 for FREE. ($90 brokerage fees do apply) ..... Ugh.

      File this into the WAY TOO COMPLICATED for John Q. Public bin. Just convert chunks of equity to stock and sell them over time like the original plan. Let the mutual funds make it easy for the public to understand. Maybe give some kind of tax incentive for GM stock so more mutual funds pick it up. And so on.
        • 5 Years Ago
        This is what happened when the Russia privatized its industry. People didn't know what to do with the piece of paper they had, they just wanted food and sold it to the first guy to come along. That guy is now an oligarch. This is a much smaller scale and Americans are more sophisticated with stocks than Russians were, however the scenario you mention would no doubt result. I don't think that offering to buy stock is necessarily a scam however. Now the question is whether or not that is worse than filtering our investment through the federal government.
      • 5 Years Ago
      No, no, no this is redistribution! Socialism! Seriously though this is interesting.
        • 5 Years Ago
        Really? I would think taking ownership of a private company and distributing its assets to the people would be socialism.

        "...the money they stole from you (taxes)..." Hahaha, don't pay and stop using any and all government services. Who needs society?
      • 5 Years Ago
      That'll never happen under control of the Democrats, or Republicans. Posturing to gain votes. Government NEVER gives back, it only takes. Another reason why I'm buying foreign if I get a new car.
      • 5 Years Ago
      Can I have some money instead? Already lost plenty in the stock market, thanks.
        • 5 Years Ago
        I'd like this as well, although I know it won't happen.
      • 5 Years Ago
      Sounds fair, as long as we're not getting it in lieu of tax refunds or other money we're owed. That would be wrong.
      • 5 Years Ago
      This wouldn't help GM much, add to that the cost of such a publicity stunt. It's better to let the current President implement his plan and see if it works.

      I've seen a lot of political stunts in my time, but this is by far the most blatant.

      The GOP is trying to buy peoples support by adding cost to the bailout. Can the GOP explain how this would be beneficial to GMs overhaul?

      If anything, the stock would quickly be sold, causing it to tank, and the whole thing would fail. How is this a good idea?
      • 5 Years Ago
      Dispersing the stock now will lead to people selling it off at pennies.

      Better to move it to trust first, then sell it off after 6 months after the 'Good GMs' exit from banruptcy over a period of 6 months.

      If GM does show signs of life, that's the best way for taxpayers to make any money back.
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