I am hopeful that my proposal for government-guaranteed loans and credit lines for the Big Three, in exchange for the meaningful structural changes, will soon become reality. Without knowing it, I was in some ways recounting what happened under President Jimmy Carter in 1979 with Chrysler. Check out this wonderful article from Time Magazine’s archives: http://www.time.com/time/magazine/article/0,9171,947356-1,00.html To summarize, The government guaranteed loans to Chrysler totaling up to $1.5 billion Chrysler had to secure another $1.43 billion in private financing at reduced rates from banks Chrysler had to gain concessions from suppliers on cost and financing Chrysler committed to $462.5 million in concessions from the company’s union employees, plus another $125 million from salaried workers. Chrysler shed unattractive assets (wholly owned parts and components factories), cut the workforce. The US government also extended the deadline by two years for Chrysler to meet C.A.F.E.
In September 1999, Harland C. Stonecipher gave a speech that opened with a passage from Isaiah Chapter 8, verse 6, " Then I heard the voice of the Lord saying, ‘Whom shall I send? And who will go for us?’ And I said, ‘Here am I. Send me!’” He did so because he was preparing for a call to action. Today the words and spirit of Harland Stonecipher, the founder of LegalShield, will ring through my voice today. Anyone that knows me knows that I love the United States of America. This country offers more freedom, more opportunity than any other country in the world! This is a country that promises to offer each of us the ability to succeed and achieve as much as our desire and abilities will allow us. The promise is for everyone. It is the United States Constitution. The only limits in America should be those we place upon ourselves. But today, but not just today, for more than 200 years, we realize that there is a problem with
U.S. Interest rates Over the next two years, rates will be low by historical standards. This will be bad news for fixed income investors, and good news for borrowing costs. In the 5-10 year time frame, there will be pressure for U.S. interest rates to rise due to the size of the U.S. government budget deficit. In addition, as the economy rebounds (and trust me, it will rebound), then the Federal Reserve will raise interest rates to hold inflation in check. So when the government spends more than it collects in taxes, who pays the difference? Today, the shortfall caused by taxes collected being less than government expenditures, has been funded by foreign government purchase of Treasury bonds of various durations. Indeed, of all of the "savings" in the world, the U.S. consumes 85% of it to finance its borrowing. Mind you, the shortfall could be funded by US citizens buying government bonds, and if investors become more risk averse over the next two decades, this may occur. B