Government Rescues GMAC Once Again

GMAC is projecting a $5 billion fourth quarter loss. A record breaking sum for the troubled financial company. This loss was reported shortly after the government gave the company a third bailout sum at 3.8 billion dollars. The company claims that they will be selling $3.8 billion in troubled mortgages that are at the head of the company’s financial woes. So what about the other $1.2 billion?

Too Much Government Assistance

The government has pumped almost 11 billion into the financially troubled company in efforts to keep it afloat. Their efforts aren’t working. The company continues to see losses in greater and greater number. They failed to raise the 11.5 billion in capital that the government required this year so instead of holding the company accountable the government gave them more cash.

The company is projected to continue to report losses during 2010. So what does that mean for government bailout? If the company does not receive the funds they need then they will have to file for bankruptcy. Should tax payers have to pay for their poor money management skills? Risky investments and sub-prime loans have crippled the company and we should not have to pay for their financial mistakes.

Money Better Spent Elsewhere

The 11 billion the government has spent on this company could have provided much needed funding to schools across the country. Countless school districts are having to cut teaching and support staff to make their budgets. This only hurts the students. With larger class sizes and overburdened schools how can we expect our children to thrive?

If the government spent as much money on education and training services for the unemployed, then our country would not be in such a mess. Our economy will continue to sink and the government will continue to bailout the big companies. What about the little people? The working class American? I’m not a socialist but there needs to be some accountability on the part of the government. Should CEOs continue to receive million dollar bonuses when their company is failing and relying on government money to keep running?

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About the Author: Hoàng Kang

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