It’s always too good to be true in Washington
When it comes to contracts, most people want things to be pretty straightforward. Take out a loan, pay it back. Hire someone to build a house, pay the person what you agreed upon. Simple.
Washington has different rules. One example of this is how General Motors falsely claimed it had repaid the taxpayers in 2010. From a recent Tea Part Patriots post:
When then-CEO Ed Whitacre said GM had paid back its government loans in 2010, it was quickly found out this was a lie. Yet Whitacre was not held responsible for this manipulation of taxpayer trust, including his appearance in this April 2010 ad.
…[W]hen government is involved in this way in the private sector, one has to look under every rock to make certain all facts are being presented.
Another example of this convoluted and corrupt contract system is the AIG claim that it repaid the government fully for loans taken out in 2008, with interest. They claim total profit for taxpayers is over $22 billion. While the claim is accurate, as reported by Tea Party Patriots in December 2012, PolitiFact has a $17.7 qualifier (emphasis added) that I missed at the time:
Still, the New York Times editorial board and critics of the bailout point out that amount doesn’t take into account tax breaks the company got as part of the deal. Former members of an oversight panel said in March that a special tax exemption offered by the Treasury in 2008 amounted to a “stealth bailout.”
It allowed AIG to count net operating losses against future tax bills, which “some estimate has contributed to $17.7 billion in profits for the company,” according to the group of former oversight panelists, including chair Elizabeth Warren, now a Democratic senator from Massachusetts.
So, have the government’s loans been repaid, with a “positive return” of $22 billion for taxpayers? Yes. Was the entire U.S. bailout of AIG, including special tax provisions, that profitable? No.
This is standard policy in Washington: give special interest buddies great treatment while ignoring the huddled masses, their Constitutional duty to promote the general welfare falling by the wayside. This is another reason to shrink the size and scope of government, so that all people and businesses start on equal footing.