“If we don’t get our second installment of the funding we’ll run out of cash, it’s that’s simple,” said Fritz Henderson. “We’ve been finalizing what we need to do. We anticipate receiving it. But it’s critical that we receive it.”

The last payment for GM is scheduled to be paid out in mid-February, but those funds are contingent upon the government receiving a detailed business proposal from the company that explains how they plan on turning things around.

If the money doesn’t arrive soon, the whole company will go under. I wonder how many tears (other than from workers and suppliers) the world would really shed in this case.

After campaigning with the motto of “change”, Barack Obama’s “stimulus” package, dubbed the American Recovery and Reinvestment Plan is expected to cost anywhere from $675 -$775 billion dollars, leaving “change” for what’s left in our pockets after he’s done spending.

When comparing apples to apples, his plan will end up costing roughly 13.5 times more – on the low end, and over 15 times more on the high end – than Bernard Madoff lost in the biggest Ponzi scheme ever reported in America.

Exact details of Obama’s proposed stimulus package haven’t been officially disclosed, but Timothy Geithner, Obama’s newly appointed treasury secretary, said that the plan includes a combination of tax cuts and spending on roads, bridges and other infrastructure. Barack Obama believes this can help save or create 3 million jobs.

The plan has already came under fire by economists and Republicans for the massive amount of spending it calls for.

In response, Obama has added an approximate $300 billion dollars in tax cuts to businesses and employees. Under his proposed plan, most workers will qualify for credits of up to $500.00 and businesses will be offered incentives to hire new employees and invest in equipment for factories.

Other proposed measures include extended unemployment benefits to the unemployed, unemployment benefits for part-time workers, tax breaks for individuals and couples and medical benefits.

Just like the $700 billion dollar bailout that aided the banking and auto industries, expect the new Democratic lead Congress to push this plan through quickly.

In his January 3rd weekly radio address Barack said, “If we don’t act swiftly and boldly, we could see a much deeper economic downturn that could lead to double-digit unemployment.”

Although Obama’s plan will certainly put a band-aid on the problems facing America, it still doesn’t address the deeper issues.

On a micro-scale, personal deficit spending creates more personal debt, higher interest rates and lowered future earnings as the consumer pays back their lenders. Here in the real world, creditors stop issuing credit if you prove yourself unworthy. On a macro-scale, Government spending is much of the same, only on a much larger scale with the ability to keep printing cash on as “as-needed” basis.

What if businesses aligned themselves, appointed better leadership
and learned how to be profitable without stock options or other tom foolery? What if corporate leaders (past and present) that stole or mislead investors, employees and the good faith of America were forced to be held accountable for their actions and were forced to repay for their slights? What if businesses that could no longer compete were forced to go out of business?

Capitalism has taken a back seat and now the whole country gets to go along for the ride.

A recent display of bad form occurred during the “Bowl Games.” Companies that have accepted billions from our government were still advertising during the Bowl Games, a move that didn’t sit well with many viewers.

“Some of the advertising folks at these firms might think it’s important to put their corporate brand on public events, but taxpayers might think they’re being taken for a ride,” said Pete Sepp, vice president for policy and communications at the National Taxpayers Union.

Bailed out banks are big ballers

This is only the tip of the iceberg. A bigger conflict of interest would be that these same companies are still lobbying the government, despite getting public funds. Should companies that have failed so enormously be allowed to shape public policy? And if companies aren’t lending money to Americans, then why bother spending huge money on ads?

That’s the exact question that Republican Scott Garrett posed.

“The irony is these guys aren’t lending to people, so what are they advertising for?” Mr. Garrett said.

Bank leaders could care less

Of course you can’t actually expect leaders of the nation’s banks to feel guilty about advertising while accepting bailout cash.

“For the last several years this has been part of an integrated marketing strategy and no taxpayer-funded TARP money was used for it,” said Citi spokesman Luis Rosero.

The auto industy has a huge base of lobbyists

Now that the US auto industry has been bailed out, will the still be allowed to lobby against fuel efficiency laws as they’ve done for decades? The auto makers have been so in love with gas guzzling vehicles for so long now that they automatically fight any push for greater fuel efficiency, which would also reduce our nation’s dependence on foreign oil.

Now that bailout funds have been dispersed to keep the auto makers in business, shouldn’t we as taxpayers expect that they should be allowed to exert less pressure on policy in Washington? Whether they do or not will be interesting as it concerns Barack Obama. Obama has pledge greater fuel efficiency on the campaign trail, and now that the government he represents is an investor in the “Big Three” auto makers, he’s in a position to push them to greater change.

Whether he does so successfully may end up being contingent on the power of the auto makers lobbying efforts. Personally, I’d like to see these companies lose any right to lobby now that they’re being “bailed out” by public funds.

Bailout insanity full speed ahead

There doesn’t appear to be any temperance ahead for any of the bailed out companies. In fact, taxpayer dollars are now being used to fund takeovers. That’s right, several banks are already in the process of using TARP funds to acquire rivals.

“As we see this economy shake out, there are going to be some that make it and some that don’t make it,” said Alan B. White, PlainsCapital’s chairman and chief executive. “And there are going to be good opportunities that people are going to be able to take advantage of. I hope I’m one of those.”

It turns out some companies that received bailout funds didn’t “need the money” and are now looking to use it to make higher returns.

“Some of the banks that have received the money don’t need it but decided they would go ahead and take it since it was available,” said Robert L. Clarke, a senior partner at Bracewell & Giuliani in Houston who was comptroller of the currency under presidents Ronald Reagan and George H.W. Bush. “But it has not changed their view of the risk of making loans.”

So even though these banks are willing to take money that they don’t need, they have no intention of loaning it back out to beleaguered consumers.

The bailout of the financial industry has left out one big component: the consumer. Consumers can’t expect even the slightest bit of credit reform until 2010. So in 2009, you can expecte bailed out banks to overcharge and abuse consumers in every while possible, all the while using TARP funds to take over rivals and lobby the government. Only in America.

GMAC has long been the financing arm of General Motors and government regulators feared that losing GMAC would further threaten the health of General Motors. The government also put a massive cash infusion into General Motors in the past seven days.

GMAC is strictly obligated to make payments on the interest. If they fail to do so for six consecutive quarters, the Federal Government will replace two of their board members with two G-men.

GMAC also loses some exclusive financing deals they’ve had with General Motors. So far there’s no guess on how that would hurt future profitability. Right now profits are off in the future, as both GM and GMAC fight for survival. Car sales worldwide have slowed, and in particular they’ve stalled out in the mature markets of the USA, Japan, and Europe.

I think it’s safe to say we’ll many incentives being offered to anyone who can get approved for credit. With the Federal Funds rate as low as it is, the government is doing everything to jump start the beleaguered consumer credit market.

Whether it will be enough remains to be seen.

“American Express expects to issue and sell to the Treasury preferred stock of approximately 3.39 billion dollars and warrants to purchase shares of common stock for up to 15 percent of that amount,” the company said.

The deal represents very low cost capital to American Express. The preferred shares will pay a return of 5% for the first five years. Last month American Express was granted the right to become a commercial bank.

Standard & Poor’s cut American Express’ long-term debt rating last week and at least three equity analysts this month have recommended selling the shares as higher unemployment and a decline in consumer spending threaten earnings.

Card issuers, along with securities firms including Goldman Sachs Group Inc., insurers like Hartford Financial Services Group Inc. and commercial lender CIT Group Inc., sought status as bank holding companies to tap the government’s $700 billion financial industry rescue package. CIT said today its request for $2.33 billion won preliminary approval from the U.S.

American Express customers will be expected to continue to pay their bills while the company converts to bank status.