By John Tamny
The 18th century French writer Voltaire once observed that the State is “a device for taking money out of one set of pockets and putting it into another.” Voltaire elegantly distilled what we’re witnessing right now as Washington seeks to prop up what private investors won’t: the redistribution of limited capital from the productive to the unproductive. “Stimulus” this is not.
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Though economic logic tells us that GMAC should never have received even one dollar of federal largesse, if the planned handout of an additional $5.6 billion is approved by Treasury, GMAC will be the unworthy recipient of $17 billion of taxpayer funds. The latest GMAC lifeline is being defended as a way to revive carmakers GM and Chrysler, which politicians see as important to the health of the U.S. economy.
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