In the equivalent of a Friday afternoon drop for a story seeking minimal coverage, the federal government announced they would be sinking an additional $3.8 billion in aid to lending giant GMAC. This infusion of cash gives the federal government majority ownership in another failing loan industry company.
The Obama Administration is proving its intention and loyalty to the banking industry and the fat cats that run them by throwing more money into an industry that America once dominated.
The handout GMAC is taking from the taxpayers is $3.8 billion it is minor considering they took $12.5 billion from the government earlier this year. The Teasury Department said it would increase its company stock from 35 percent to 56 percent making Uncle Sam in charge of the failing loan company.
According to the government, four of the nine board members will be personally picked by the Obama Administration and GMAC will be required to pay $14 billion in loans in order to regain control of the company.
This will be the sixth company the federal government has taken over in two years. The others are American International Group (AIG), Citigroup, Government, oops General Motors, Fannie Mae and Freddie Mac.
“We said if you do not go raise capital from the private markets, if you are unable to, we will put capital into you because it is important to the stability of the system,” Treasury Secretary Timothy Geithner explained to the Congressional Oversight Panel earlier this month. “It was never going to be possible for GMAC. They are in a unique and difficult situation.”
The question taxpayers are left asking is where is the money coming from?
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