Motoring IS Our Economy

I'm curious...if GM turns to bankruptcy, would GMAC go under? And if so, does that mean I can stop making my mortgage payments to GMAC? Would I/Should I be absolved of my debt? Just write it off?

Prolly 6 years ago now, I re-financed through Ditech...which I think is just a web front for GMAC mortgage. GM made more money in home mortgages (and the subsequent mortgage derivatives) than they ever did selling cars. Some of my earnings supported this endeavor, I suppose. But since then I've substantially paid off my debt and today I owe them $37,8oo. Interest payments are less than $185 a month now. Next year, for the first time in fifteen years, I don't expect to itemize.

If I were a typical Elk Grovian like my next door neighbors, in 2005 I would have never bothered with paying down my mortgage, and would have spent in excess of $37,800 to purchase a new family rig. A Tahoe. A Yukon. A Highlander. I find it surreal that a vehicle would cost that much, but now I find it more surreal that my mortgage is less than what an average suburban rig would cost.

The vast majority of all these owners are still paying on them...and they will still be paying on them through 2011. The end result, of course, is that GM made a fucking killing on the initial sale of each SUV and then in the financing of the vast majority of them...and even though people are still paying on them today, that's obviously not enough to keep them afloat.

I particularly love the argument we're now hearing that "we can't allow them to fail in this tough economic enviroment." This is total horseshit, because that's the argument we would have heard in any economic environment. Good or bad.

To validate everything I've ever wrote about how our economy is wholly based on the development of suburbanized sprawl and the building of motor vehicles necessary to live in and service it, comes doomerish projections that to allow any of these three to fail would precipitate a collapse in parts supply manufacturers, in thousands of dealerships, in the complete drying up of local tax revenues upon which local services are wholly dependent on the sales taxes of said vehicles.