Auto Bailout Cost Taxpayers $10 Billion Contrary to claims by some that the federal bailout of the U.S. auto industry didnt lose government funds and may even have turned a profit, the bailout cost American taxpayers nearly $10 billion, new figures disclose. The U.S. Treasury Department announced in late December the official end of the automobile industry bailout after loans given to General Motors and Chrysler had been repaid to the governments satisfaction. The bailout was inaugurated in January 2009 as part of the Troubled Asset Relief Program designed to combat the subprime lending crisis. The Auto Industry Financing Program loaned $79.69 billion to GM and Chrysler and their in-house financing companies. Some of the funds were used to purchase majority shares of the companies, in effect nationalizing them, the Heartland Institute observed in a report on the end of the bailout. The government later sold Chrysler to Italian automaker Fiat. Meanwhile the Treasury Department provided $17.2 billion in public loans to GMs financing company, now known as Ally Financial. The company made its final repayment on December 19. The bottom line: Taxpayers recovered only $70.42 billion of the $79.69 billon loaned through the bailout program, a loss of $9.3 billion — about $65.75 per taxpayer. The Treasury Department stated in a report: While the auto industry rescue resulted in a cost of $9.3 billion to the government, the cost of a disorderly liquidation to the families and businesses across the country that rely on the auto industry would have been far higher. The government’s actions not only saved GM and Chrysler but they saved many businesses up and down the supply chain. But Hester Peirce, a senior research fellow with the Mercatus Center at George Mason University, said: Taxpayer money was put at great risk, and the return on investment that Treasury now trumpets is not adequate to compensate taxpayers for the risk they took. Source: Newsmax, January 11, 2015
Posted on: Tue, 13 Jan 2015 02:27:06 +0000
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