Got this in an email:
Show time AGAIN!!
SHORT & SWEET... BUT, IT IS A GREAT EXAMPLE OF Obama's SKILL...(what skill?)
It seems like a miracle that our beloved leader was able to convince BP to establish a $20 billion slush (oops, escrow) fund to compensate those hurt by the ongoing oil plume in the Gulf of Mexico . After all, he had no constitutional power to force them to do so; so had to resort to Chicago-style negotiating.
But, let us take a closer look at the effect on BP’s finances:
1. BP will establish a $20 billion fund, but will pay only $7 billion into it during 2010.
2. BP is a British corporation, but has a very large operating entity in the US but only about 30% of it’s income is derived from the US.
3. By Generally Accepted Accounting Principles (GAP), BP must book the entire $20 billion expense in the year accrued. Therefore, they will book a $20 billion expense in 2010, reducing their US tax liability by $7 billion.
4. Our dear leader also convinced this massive corporation to show their concern for the “small people” by withholding dividends to their shareholders for the last 3 quarters of 2010. This reduces their outward cash flow by about $7.5 billion, including approximately 40% of that amount to US citizens. Assuming that the Bush tax cuts will survive through 2010, the US Treasury will lose another $450 million in taxes on that amount. We won’t even discuss the effect on the US economy.
Let us put the results into a table easily understood by the small people (including me):
BP Cash Flow:
o Escrow funding ($7 billion)
o Dividend saving $7.5 billion
o Tax savings $7 billion
o Net favorable cash flow : $7.5 billion
US Treasury Tax Receipts:
o BP Corporate income tax ($7.5 billion)
o BP Shareholders ($0.45 billion)
o Net unfavorable tax receipts ($7.95 billion)
I guess we really should expect this. After all, our dear leader is the most inexperienced man in ANY room he enters.
Now tell me …………………Did the enlightened one “Kick A#S”, or did he get ”Sucker Punched”?
Bottom line: The $20 Billion BP is putting up will create a $7.5 Billion positive cash for BP flow this year. But, Obama actually “thinks” he really did something special and “kicked a$$’ (in his own words).
In reality, BP executives are laughing at him and ‘kicked his a$$”. Oh well….what’s new with this President anyway??? He is in over his head when he starts dealing with “business people”.