I'd been trying to figure out just what bugged me so much when Mitt Romney said these words about "free stuff": "If you're looking for free stuff, if you're looking for free stuff you don't have to pay for, vote for the other guy. That's what he's all about, OK? That's not what I'm about."
It wasn't just the apparent pander to his conservative crowd... something else was bugging me. And then I saw the clip below from The Daily Show with Jon Stewart this week, and it hit me.
It's that Romney is taking advantage of the government's "free stuff," too, and has been profiting from it handsomely for a long, long time -- even as he rails about the "free stuff" that the government provides other people.
Let's just take one example -- GST Steel. Here is a little Kansas City, Missouri steel company Bain Capital bought for $75 million, but put only $8 million of its own money into the deal. They borrowed the rest. Within a year, Romney and Bain put GST Steel further into debt, borrowing another $125 million. Some of that money was put to good use, modernizing the factory. But $36 million of the borrowed money was paid to Mitt Romney and Bain in the form of a dividend. Do you get that?
Less than a year after loading the company up with debt, Romney and Bain gave themselves bonuses four times bigger than the $8 million they had put into the deal. And guess what the tax rate they had to pay on that unearned income was? A lot less than yours. You guessed it: 15 percent. Thank you for all that extra "free stuff" from the U.S. Government's tax code.
Bain also asked Kansas City for a $3 million tax break. The Bain executives were taking home $36 million in borrowed funds and were asking Kansas City to forfeit $3 million in public money for police officers, roads and schools? More free stuff!
Then, when GST Steel filed for bankruptcy and laid off 750 people, we learned that Bain had consciously underfunded its pension obligations to those employees. The company simply decided not to meet its legal responsibilities. The end result: the federal government's pension benefit guarantee corporation was stuck with a $44 million bill.
That federal agency was created for the purpose of guaranteeing pensions in the event of a catastrophe in the private sector -- the ultimate safety net. And it had to fork over the money to save the worker pensions that Bain chose to underfund.
So, that's $44 million for the pensions, $3 million for the local tax breaks and $7 million from the federal tax code. A total of $54 million in free stuff from the government. And that was just one of Bain's companies.
Mitt Romney privatizes the gains from his enterprises, but spreads the costs to the rest of us.
Seems that "free stuff" is in the eye of the beholder.
Thank you, Jon Stewart.
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