GOP plan calls for Fed to give GM, Chrysler stock to taxpayers
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 GM and 8% 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]
Reader Comments (Page 1 of 4)
John Johnson 4:02PM (6/08/2009)
Exactly what needs to happen. Thumbs up.
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Paul 4:14PM (6/08/2009)
Fully agreed - and I am not even anti a government take over.
Big Mola 4:17PM (6/08/2009)
Interesting proposition, but I hope it has a caveat preventing the shares from being sold in the first few years. I'd imagine that many people would otherwise sell them quickly! :p
Coolio 4:19PM (6/08/2009)
The Canadian taxpayers, who also "lent" billions, should get shares by the exact same rationale.
James 4:40PM (6/08/2009)
(Horse)Power to the People!!!
alex 4:52PM (6/08/2009)
I don't know how i feel about this... the govt has been loaning out money like it's goin out of style... for our govt to not go (even more) completely broke, these loans need to be repaid. If GM turns around successfully, the govt could potentially come darn close to breaking even on the deal if they hold on to the stock. But if they give it away, it's a 100% certain $50 billion loss for the govt.
geo.stewart 5:52PM (6/08/2009)
Alex,
Where do you think the 'government' gets its money, or its power? From the taxpayer. the government didnt bail out GM or Chrysler, you did (if you pay taxes) and I did.
I think too many people have lost sight of this fact, including the government. they spend our money willy nilly, and then say they will give us some back in 'tax relief', all the while building up debt for our children rather than spending according to what they have.
csquirrel 6:32PM (6/08/2009)
HAHAHAHA, it's not Socialism when the Republicans do it. I guarantee you if this goes through you and I won't see a single stock, but rather it will somehow go to the lobbyists that supported the senators pushing through the bill. Wealth redistribution, socialism at its best brought to you buy the Republican party.
alex 7:12PM (6/08/2009)
@geo.stewart
don't patronize me. of course I understand that the government's funds come from the taxpayers.
You said this: "they spend our money willy nilly, and then say they will give us some back in 'tax relief', all the while building up debt for our children"
Agreed. Now let me point something out here... I can't think of a way that the government could spend any more money "willy nilly" and build up debt than by buying a ton of GM stock and then just giving it away. Seriously, they might as well be dropping $50 billion from helicopters over all the major cities for people to pick up off the streets.
If the government has a surplus, then by all means, go all Marxist and distribute the wealth. But if the government has a deficit and is racking up debt like crazy, let's put any extra wealth towards plugging that hole so that our kids won't live in a country with 80% income tax.
tuxchown 10:41PM (6/08/2009)
Sounds excellent. But I bet it doesn't fly.
Dave 10:57PM (6/08/2009)
I agree with the principle - but I disagree completely with the practice.
It will require a tremendous amount of money and man hours to handle the job of doling out the stocks. Better to sell them outright on the NYSE.
As usual, the Republicans give lipservice to smaller government, but actually enlarge it constantly. (not that the Dems are any better)
tekd 4:03PM (6/08/2009)
lol, so how many shares do we get under this plan?
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MM 5:06PM (6/08/2009)
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.
Cornelius 5:24PM (6/08/2009)
I'd assume the number of shares would correspond to how much taxes you've paid. The sad part is, issuing stock certificates to every taxpayer is an expensive chore in of itself (I'd imagine tens of millions of dollars). Plus, if we only get 1-2 shares per person, the commission fees we'd pay to our brokers to sell it wouldn't even be covered by the share price.
tekd 8:13PM (6/08/2009)
@Cornelius
Yeah at current share prices I wouldn't be surprised if it costs $15 to print, sort and mail all those stock certificates for stocks with a $5 value.
And then it'll cost us more money to send the certificates to a broker, and then another $10+ to sell the shares.
Of course they don't necessarily have to issue us paper shares if they basically set up crappy broker accounts for everyone. I'm not convinced the shares would even be worth the fees to sell them though.
Cougs 8:38AM (6/09/2009)
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).
Hale 4:06PM (6/08/2009)
I think its a very good plan, but don't see it happening.
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MajorGeek 4:09PM (6/08/2009)
Can I have some money instead? Already lost plenty in the stock market, thanks.
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paul34 4:26PM (6/08/2009)
I'd like this as well, although I know it won't happen.
Sea Urchin 4:10PM (6/08/2009)
I am not sure i agree with the plan, but once again this shows the public anger at D2 and Obama. GM and Chrysler better be prepared for boycott from some costumers.
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