• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

US Lost Ten Billion Dollars on GM Bailout

polgara said:
I read this morning that Mary Barra has been chosen to be the first female CEO at GM! Interesting bio.
Click to expand...

Interesting. I'll have to look that up. Good morning, Polgara. I have a snow day today.:2wave:
 
Lord Tammerlain said:
Considering the probably costs of letting GM close, 11 billion is not bad

The cost would be, increased medicare and Medicaid bills, welfare and UI payments not just to GM workers and retirees, but to dealership and suppliers as well
Click to expand...

All that would have been VERY short term as other manufacturers came in to fill the void. If you'll remember, the entire auto industry didn't implode when AMC went out of business and Chrysler picked up the Jeep line.
 
Lord Tammerlain said:
Considering the probably costs of letting GM close, 11 billion is not bad

The cost would be, increased medicare and Medicaid bills, welfare and UI payments not just to GM workers and retirees, but to dealership and suppliers as well
Click to expand...

Well there you have it. "It doesn't matter."
 
Jack Hays said:
Interesting. I'll have to look that up. Good morning, Polgara. I have a snow day today.:2wave:
Click to expand...

The current storm in your area of the country sure seems to be taking its time moving out! :mrgreen: Enjoy your snow day!
 
ttwtt78640 said:
Most would agree that the other option, letting them pursue bankruptcy, would have cost at least 4 times that amount from lost taxation, UI benefits and added social program spending. The lesson learned should be that too big to fail really means very painful to bail. While the profits are mostly private, the losses are mostly public when big business gets too big.
Click to expand...

And don't forget how they bitched about CEO fatcats getting galactic sized bonuses and umbrellas for ****ing the company up. I wonder how much of that lost $10B went to line union leader pockets and Democrat campaign coffers.
 
American said:
And don't forget how they bitched about CEO fatcats getting galactic sized bonuses and umbrellas for ****ing the company up. I wonder how much of that lost $10B went to line union leader pockets and Democrat campaign coffers.
Click to expand...

I am sure that the appropriate thank you gifts were bestowed to the appropriate campaign funds. ;)
 
Jack Hays said:
Supposed to be gone midday. Then we dig out.:cool:
Click to expand...

It's currently 21 degrees here, but thankfully no new snow or ice forecast for the next couple of days. :thumbs:
 
Jack Hays said:
The US lost $10 billion on the GM bailout. What do you think about that?

Treasury sells last shares in GM, posts a loss of $10 billion

Danielle Douglas DEC 9
The government will lose $10 billion on the deal, which kept the automaker from collapsing.

"The Treasury Department announced Monday the sale of its remaining shares in General Motors, closing the books on one of the most controversial government interventions of the financial crisis. The government will lose $10 billion on the deal, which kept the automaker from collapsing.":peace
Click to expand...

Well Jack, what I think is the news should also be reporting on GM's financial position as of their last quarterly report.

I think taxpayers would be interested to know their unfunded pension liability is larger than it was when we bailed them out. I think taxpayers would be interested to know they are showing more debt today than they did two years ago. I could go on and on.

Earnings Releases - Quarterly Reports & Financial Releases | GM.com

Of course, we need to remember there were dozens of automobile manufacturers who would have easily stepped in and increased their own production to fill in for the closing of GM globally. Well, maybe not.

Obviously, nobody would have been interested in manufacturing capacities into the millions, and a global sales and service network in place and in operation. Without those taxpayer dollars, and rewards to the co-conspirators, er, Unions, no doubt the entire Corporation would be nothing but tumbleweeds and spiderwebs by now, with those millions of unemployed auto workers still warming their hands by the trash can fires fueled by broken dreams.
 
ocean515 said:
Well Jack, what I think is the news should also be reporting on GM's financial position as of their last quarterly report.

I think taxpayers would be interested to know their unfunded pension liability is larger than it was when we bailed them out. I think taxpayers would be interested to know they are showing more debt today than they did two years ago. I could go on and on.

Earnings Releases - Quarterly Reports & Financial Releases | GM.com

Of course, we need to remember there were dozens of automobile manufacturers who would have easily stepped in and increased their own production to fill in for the closing of GM globally. Well, maybe not.

Obviously, nobody would have been interested in manufacturing capacities into the millions, and a global sales and service network in place and in operation. Without those taxpayer dollars, and rewards to the co-conspirators, er, Unions, no doubt the entire Corporation would be nothing but tumbleweeds and spiderwebs by now, with those millions of unemployed auto workers still warming their hands by the trash can fires fueled by broken dreams.
Click to expand...

Greetings, Ocean.:2wave:

What a dramatic narrative! Ever written a novel?:mrgreen:
 
Jack Hays said:
Greetings, Ocean.:2wave:

What a dramatic narrative! Ever written a novel?:mrgreen:
Click to expand...

Hey Jack. :2wave:

Have I ever written a novel? In fact, I've written many. Can't seem to get a single one on paper though. ;)

This GM deal is such a farce. Oh well, just put it on our tab, right?
 
ocean515 said:
Hey Jack. :2wave:

Have I ever written a novel? In fact, I've written many. Can't seem to get a single one on paper though. ;)

This GM deal is such a farce. Oh well, just put it on our tab, right?
Click to expand...

I suspect that we share the view that old fashioned bankruptcy would have been better.:cool:
 
Peter King said:
Sure, some money might have been lost from the real loans they gave out, but I think they will have saved the government a lot of more than that due to not having to pay unemployment benefits for thousands upon thousands upon thousands of car workers and people who supply stuff to the car industry. And a lot of people are dependent on that money. Whether it is the local shops who kept their customers, banks having to take back homes from people who would have lost their jobs. The amount that is going to be saved by not having let the auto industry collapse will be much more than 10 billion IMHO.
Click to expand...

Do you think the market for cars would have gone away if GM had to go through bankruptcy (which they still did even with the bailout, and will probably have to do again)?
 
Jack Hays said:
I suspect that we share the view that old fashioned bankruptcy would have been better.:cool:
Click to expand...

Oh yes. GM would have remained and would have been healthier today, without you and me, among others, having to foot the bill.

Consider this, GM is still working through the tens of billions the IRS agreed to let them write off against profits, so the actual cost of our bailout is way beyond the $10 billion reported.
 
Lutherf said:
All that would have been VERY short term as other manufacturers came in to fill the void. If you'll remember, the entire auto industry didn't implode when AMC went out of business and Chrysler picked up the Jeep line.
Click to expand...


AMC was alot smaller then GM,

The economic conditions were a lot different as well. It was a severe economic contraction the US went through in 2008. GM would not have found debtor in financing money as the banks were being bailed out as well. Had GM went under the majority of suppliers would have gone under as well, leading to a further contraction. Recall that auto sales dropped from just under 17 million per year to if I recall correctlly just over 10 million.

Under more normal economic conditions I would have said to let GM fail and enter bankruptcy in the normal manner. The banks could fund the recovery of GM, a potential buyer could be found to pick up the remains, but not in 2008
 
Lord Tammerlain said:
AMC was alot smaller then GM,

The economic conditions were a lot different as well. It was a severe economic contraction the US went through in 2008. GM would not have found debtor in financing money as the banks were being bailed out as well. Had GM went under the majority of suppliers would have gone under as well, leading to a further contraction. Recall that auto sales dropped from just under 17 million per year to if I recall correctlly just over 10 million.

Under more normal economic conditions I would have said to let GM fail and enter bankruptcy in the normal manner. The banks could fund the recovery of GM, a potential buyer could be found to pick up the remains, but not in 2008
Click to expand...

You're being REALLY short sighted.

Just because GM stopped making cars and trucks doesn't mean that the demand for these items disappeared. People would still want their vehicles and manufacturers would still find a way to deliver on that demand. The likely outcome would be that Ford and Chrysler would have picked up some of the premium line and other manufacturers would have picked up facilities and equipment for producing specialty products. It's even possible that we'd have seen a surge in alternative fuel vehicles since those manufacturers could have picked up important parts for their production on the cheap.
 
Lutherf said:
You're being REALLY short sighted.

Just because GM stopped making cars and trucks doesn't mean that the demand for these items disappeared. People would still want their vehicles and manufacturers would still find a way to deliver on that demand. The likely outcome would be that Ford and Chrysler would have picked up some of the premium line and other manufacturers would have picked up facilities and equipment for producing specialty products. It's even possible that we'd have seen a surge in alternative fuel vehicles since those manufacturers could have picked up important parts for their production on the cheap.
Click to expand...

And you dont seem to understand that this does not happen overnight. In the mean time hundreds of thousands if not millions of people would be thrown into unemployment and effect of such a major event would cost far more than 11 billion dollars.
 
Lord Tammerlain said:
AMC was alot smaller then GM,

The economic conditions were a lot different as well. It was a severe economic contraction the US went through in 2008. GM would not have found debtor in financing money as the banks were being bailed out as well. Had GM went under the majority of suppliers would have gone under as well, leading to a further contraction. Recall that auto sales dropped from just under 17 million per year to if I recall correctlly just over 10 million.

Under more normal economic conditions I would have said to let GM fail and enter bankruptcy in the normal manner. The banks could fund the recovery of GM, a potential buyer could be found to pick up the remains, but not in 2008
Click to expand...

The record does not support your opinion. No other auto manufacturer in the world had the capacity to pickup the sales production GM had at the time of their filing. Regardless of the economics of the time, vehicles were still being produced and sold.

The primary sticking point standing in the way of selling GM was the US Governments demand that the unfunded pension liabilities remain with the company, and become the liability of any new owner.

Unworkable by design.
 
rhinefire said:
Anyone here realize WE paid the 10 billion??
Click to expand...

Yes and no.

It's true that the GM bailout resulted in a $10B loss, and that the auto industry component of TARP more generally (including Chrysler Group and Ally Financial as well as GM) resulted in an overall loss of something like $27B.

If you add in the $2.2B that Fannie Mae & Freddie Mac still owe the taxpayers it totals up at just under $30B in losses.

But, I don't think it's fair to take TARP and look at it in bits and pieces like that as anything more than a strictly academic endeavor.

After all, by way of analogy, you don't look at your stock portfolio in pieces or the profit/loss of individual brands or business units within a corporation in pieces.

In a very rough sense, you take the profits, you subtract the losses and the cost of doing business, and you arrive at your net income or loss.

So let's look at the other side of the ledger.

Between the banking component of TARP, currently a $25B profit, and the sale of AIG stock and non-core assets, a $23B profit, you've got an aggregate $48B profit set off by a $30B loss.

All told, the bailout returned a profit of $18 billion in cash to the American people, which doesn't account for the hundreds of thousands of jobs it saves at a point when America was shedding jobs at a cyclic rate.

Now, continuing the analogy, to look at GM as an individual stock purchase within a portfolio, or as an individual brand within a corporate stable, and say, "Yeah, it was a really bad idea to pump money into this activity", I agree. That dog just didn't hunt and it detracted from the profits/returns we might have enjoyed if we'd dome something different with that money.

On the face of things it appears that pumping money into the government-sponsored businesses and the businesses that are union-heavy manufacturing concerns was the bad investment on a strictly dollar-for-dollar basis.

Investing in financial services was a the smart move.

But to make the blanket statement, "WE paid that $10 billion", no. We didn't. We benefited from TARP in the long run in numerous ways.
 
Last edited:
Jack Hays said:
The US lost $10 billion on the GM bailout. What do you think about that?

Treasury sells last shares in GM, posts a loss of $10 billion

Danielle Douglas DEC 9
The government will lose $10 billion on the deal, which kept the automaker from collapsing.

"The Treasury Department announced Monday the sale of its remaining shares in General Motors, closing the books on one of the most controversial government interventions of the financial crisis. The government will lose $10 billion on the deal, which kept the automaker from collapsing.":peace
Click to expand...

I wonder how much we lost to all the banks and wallstreet.
 
You must log in or register to reply here.
Back
Top Bottom