Paying back by borrowing more. As we learn from most of our friends in business, that's not the way to get out of a jam. But that is almost always the government tries to squirm out of its problems.
And that's what Chrysler's doing right now, as they want you to believe that they've paid back all of their billions in bailout money.
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That's complete bull, of course, because taxpayers still own 8% of the company, so we're still on the hook. And Chrysler's $7.5 billion payback came from borrowing more money.
General Motors (NYSE:GM) tried to pull a similar kind of bailout double talk last year, when the company claimed to have repaid its $6.7 billion bailout loan. It turned out that the payback check came from government money that GM had set aside during bankruptcy proceedings.
While Chrysler's borrowing its payback money from the private sector, over a billion of that money is coming from the Italian company Fiat, which would increase its stake in the company to 46%. So Americans are still on the hook for a company that is rapidly becoming a foreign car company. That’s absolutely nuts!
And we can't forget that the union that brought the company to its knees in the first place was given a 60% chunk of Chrysler by President Obama -- who just ripped up the ownership papers of secured bondholders to hand the company to the unions.
That's usually called theft. But in this case it was called a "bailout for the good of America." Well, America got the short end of this stick. Your tax dollars are still working to support a company that's owned by unions and Italians. And the creative accounting of paying back by borrowing more is no solution.
It doesn't work in the private sector, and it won't work in the public sector.