Sen.: U.S. Stake In GM Akin To Socialism

(AP Photo/Haraz N. Ghanbari)
As General Motors heads down the road to bankruptcy aided by taxpayer dollars, Sen. Richard Shelby (R-Ala.) says the U.S. is on the road toward socialism.

Speaking to The Early Show Friday, a day after the auto giant reached a deal — brokered by the U.S. government — with its bondholders that will eliminate the company's unsecured debt in exchange for stock, Shelby said bankruptcy was unavoidable, but that the decision should have been made six months ago.

"This is a sad day," Shelby, the ranking Republican on the Senate Finance Committee said. "This was a great company and look at it today."

Along with a $30 billion infusion of government aid, taxpayers stand to own more than 70 percent of GM.

The Alabama senator said he fears the company won't be able to compete if it's run by the government. He added that he foresees more taxpayer money going into GM, a company that was "run into the ground."

"We should have let the market forces work because there is no end in sight," he said.