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US Lost Ten Billion Dollars on GM Bailout

Jack Hays

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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
 
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
 
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.
 
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

They still lost hundreds of thousands of jobs and Delphi worker's pensions got screwed.
 
Anyone here realize WE paid the 10 billion??
 
What a waste of money. This is a great example of squandering tax payer dollars and all we did really was to save union jobs with bloated contracts that will make GM fail again. If GM had been allowed to go bankrupt and these contracts could have been renegotiated so that the company stood a long term chance of surviving and us tax payers would not be 10 billion in the hole.
 
But but but... in this recent progressive leaning thread which quotes a Center for Automotive Research study (with no link I might add), Conservatives are challenged to admit that the GM deal has been fully paid off! What a conundrum!

This former con would say, its about time. It doesnt change the fact that GM only survived in its current form because it cheated by getting tax payers to give them billions in loans and welfare, and lets not forget how shareowners were shafted when the govt gave half the company to the unions. GM has a long way to go to earn the trust of cons, to erase this black mark on their history.
 
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.

MIGHT have, not would have. And only because the govt forces us to bail out people as well as businesses. We dont have to have federal UI or social program spending. And what about the cost to creditors?
 
MIGHT have, not would have. And only because the govt forces us to bail out people as well as businesses. We dont have to have federal UI or social program spending. And what about the cost to creditors?

The gov't forces the bailouts but the social spending is somehow optional? I think you have it backwards there. Special legislation was needed for the bailouts, the social spending is largely "mandatory" and is increased annually as a routine "budget" matter.
 
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

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.
 
Luckily our country has a surplus of money and 10 billion is no big deal. And I think we can all agree that nothing helps the private sector more than government intervention. Until our country is in debt, until our our teachers, cops and firefighters are underpaid, until our schools are underfunded, or people are going hungry in this country then our government should continue to blow money like its nothing since there are no other uses for it.
 
Given the fact that the GOP induced government shutdown over nothing cost the country about $24 billion, and we have nothing to show for it....I think assuring the US auto industry for decades is quite a bargain at $10B.
 
The gov't forces the bailouts but the social spending is somehow optional? I think you have it backwards there. Special legislation was needed for the bailouts, the social spending is largely "mandatory" and is increased annually as a routine "budget" matter.

It doesnt have to be. We should let GM fail, and we should let people fail. What youre basically saying is because the govt has chosen to take care of people from cradle to grave, we're screwed either way.
 
Given the fact that the GOP induced government shutdown over nothing cost the country about $24 billion, and we have nothing to show for it....I think assuring the US auto industry for decades is quite a bargain at $10B.

Not spending money costs 24 billion?
 
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.

Using that logic, the federal govt should never let any business fire an employee due to financial reasons.
 
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.

It's a fair point but we'll never know. I think the industry could have been saved by good old fashioned bankruptcy too.:peace
 
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
That's less than the 13.4 billion President Bush gave them.

http://www.nytimes.com/2008/12/20/business/20auto.html
 
It doesnt have to be. We should let GM fail, and we should let people fail. What youre basically saying is because the govt has chosen to take care of people from cradle to grave, we're screwed either way.

You again, show lack of understanding of the US gov't. We choose the gov't, at least on paper, it is time for the sheeple to choose more wisely, IMHO.
 
Not spending money costs 24 billion?

That's an odd way to put it....but yes. That's an estimate from S&P, and probably an underestimate. We basically gave thousands of government workers a paid vacation while disrupting lots of ongoing projects. That's $2B right there. I know scientists who had ongoing experiments destroyed or delayed for a year. That's costly.
 
Using that logic, the federal govt should never let any business fire an employee due to financial reasons.

Yeah, not talking about 1 or 2 jobs lost, or even 100 or 1,000.

The Center for Automotive Research, an Ann Arbor, Mich., think tank, issued an updated report Monday saying that if the government hadn't intervened and GM went out of business, nearly 1.9 million jobs would have been lost in 2009 and 2010. Federal and state governments also would have lost $39.4 billion in tax revenue and payments made for unemployment benefits and food stamps, the study said.

U.S. exits GM stake, taxpayers lose $10.5 billion - NBC News.com
 
What a waste of money. This is a great example of squandering tax payer dollars and all we did really was to save union jobs with bloated contracts that will make GM fail again. If GM had been allowed to go bankrupt and these contracts could have been renegotiated so that the company stood a long term chance of surviving and us tax payers would not be 10 billion in the hole.

My apologies, but I took your excellent rendition of the story and changed a few words to describe a similar situation.
Kept the original words in parens.
Here goes:
What a waste of money. This is a great example of squandering tax payer dollars and all we did really was to save Wall Street (union) jobs with fraudulent (bloated) mortgage backed securities (contracts) that will make the banks (GM) fail again. If the banks (GM) had been allowed to go bankrupt and these mortgage backed securities (contracts) could have been renegotiated so that the economy (company) stood a long term chance of surviving and us tax payers would not be trillions (10 billion) in the hole.
 
It's a fair point but we'll never know. I think the industry could have been saved by good old fashioned bankruptcy too.:peace

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