GM made it official this morning filing for bankruptcy but it wasn’t a surprise to those in the industry or the government. According to MarketWatch, General Motors’ move came as a result of “months of speculation.”
So why the government bailout?
The answer to why the government bailed out GM, knowing full well that it would probably not be able to recover before declaring itself bankrupt, is that this car company’s losses would now be put into the hands of the American People, increasing our tax burden. Also, government majority ownership of the company would empower the government for more control over private industry.
At least GM won’t have to change its letterhead: GM will now stand for “Government Motors!”