The government has already poured $12.5 billion into GMAC since last December, and now the company is negotiating for $2.8-$5.6 billion more. Oh, and FDIC will allow the company to max out its borrowing capacity under TLGP, bringing the total there to $7.4 billion.

Yet another argument against those who say we “made money” on TARP because Goldman, AmEx and a few others bought back their warrants at a small premium. All the profits from those warrants wouldn’t add up to the amount we’ve already poured into GMAC, never mind this latest infusion. There’s also the small matter of $100 billion+ we’re never getting back from AIG….

Readers may recall that FDIC was rather peeved at GMAC for previously offering high rates on deposits. This is the ultimate moral hazard of deposit insurance. Depositors aren’t willing to impose discipline on the bank — taking their money out — because they know it’s guaranteed. GMAC knew this and, through its subsidiary GMAC Ally Bank, offered the highest deposit rates in the nation for a time.

In order to sell more government backed debt under TLGP program, FDIC struck a deal by which GMAC will “keep its [deposit] rates at certain amounts,” according to WSJ.

One would think a change of management might be in order. Well, it’s not gonna happen. CEO Alvaro de Molina — formerly CFO at Bank of America — will stay on.

The real reason behind this bailout is GM. In an age when cars are still purchased on credit, someone has to front the money if automakers are going to move inventory. For GM, that means GMAC, which in turn means taxpayers.

Taxpayers are lending themselves money to buy cars (via GMAC). To buy houses (via Fannie, Freddie and very soon FHA). To buy anything and everything that has to be financed.

My question: When are we actually going to pay for any of it? Also: When we realize we can’t, what’s going to happen to the economy?