HIDDEN VALUE

Dear Reader,

You must be sick of hearing about the bailouts by now.

We are.

The $700 billion TARP… the $786 billion Obama ‘stimulus’…  the $750 billion placed on hold, just in case the banks need it.

But there’s another little-known bailout we’d like to talk to you about today.

Some even consider it one of the secret reasons that the U.S. bailed out GM and Chrysler.

Pensions…

GM pays out around $7 billion a year to its retired employees. And it’s set to do that for the next ten years.

A few years ago, GM had assets of over $100 billion – more than enough to cover the benefits.

But after the rout in stocks in 2008 and early 2009, it’s unlikely that GM has the money to cover its pension obligations.

If GM goes bankrupt, its pensions would be taken over by the Pension Benefit Guarantee Corp (PBGC).

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