So how much would taxpayers have lost without the bailout? Hint ... its more than $10 billion. For starters, President Bush lent them $17.4 billion at the end of 2008. Most if not all of that would have been lost. Of course there's the 1 million or so additional people out of work. So there's the unemployment that taxpayers would have had to pay, and then there's the loss of income and resultant loss of income tax for those 1 million unemployed.
I often hear people say they should have gone through a "normal" bankruptcy ... whatever that is. Of course what none of them are ever able to answer is who in 2009, would have the $40 to $50 billion to risk on investing in GM or $15 billion to risk on Chrysler. Without that sort of cash injection, both companies would have gone into Chapter 7 liquidation and it would have cost taxpayers much more.
The biggest thing that got to me like the other issues with Obama is that he told the Country and the Head of GM told the country that the debt was paid when it really wasn't. Yes they went through the bankruptcy and lots of dealers closed. It was inevitable. Would they have went away, no. Look at Obama's other failed Green projects that filed for bankruptcy and closed. Millions in taxpayer dollars lost, nothing said.
Perhaps its wordsmithing, but GM and Chrysler did pay the money they owed the government. The loss came from the government selling the stock position they took in the new companies in exchange for their cash infusion. They could have continued to hold the stock if they chose to, but given that the TARP fund that was the source of the cash actually made money overall for the US taxpayer even with the loss on the auto stock, I think it was a wise decision for the government to sell. I never hear anyone applauding the government for making money on the overall bailout, only for the loss in stock value for GM. Seems somewhat disingenuous to me. BTW, Ford borrowed almost $6 billion from the government in 2009, and they are still paying that back.
As far as green projects the same idea holds. If you want to criticize some for failing, you have to then also applaud the ones that succeeded. And if you want to base validity on whether money was made or lost by taxpayers you have to total up all the money given out and returned to taxpayers for all the projects, not just pick the ones that didn't pay back.
It would be like criticizing me for having a few stocks in my portfolio loose money last year even though overall my portfolio made 18%.
So how much would taxpayers have lost without the bailout? Hint ... its more than $10 billion. For starters, President Bush lent them $17.4 billion at the end of 2008. Most if not all of that would have been lost. Of course there's the 1 million or so additional people out of work. So there's the unemployment that taxpayers would have had to pay, and then there's the loss of income and resultant loss of income tax for those 1 million unemployed.
ReplyDeleteI often hear people say they should have gone through a "normal" bankruptcy ... whatever that is. Of course what none of them are ever able to answer is who in 2009, would have the $40 to $50 billion to risk on investing in GM or $15 billion to risk on Chrysler. Without that sort of cash injection, both companies would have gone into Chapter 7 liquidation and it would have cost taxpayers much more.
http://www.dbusiness.com/September-October-2012/What-if-Taxpayers-Hadnt-Bailed-Out-GM-and-Chrysler/
DeleteThe biggest thing that got to me like the other issues with Obama is that he told the Country and the Head of GM told the country that the debt was paid when it really wasn't. Yes they went through the bankruptcy and lots of dealers closed. It was inevitable. Would they have went away, no. Look at Obama's other failed Green projects
Deletethat filed for bankruptcy and closed. Millions in taxpayer dollars lost, nothing said.
Perhaps its wordsmithing, but GM and Chrysler did pay the money they owed the government. The loss came from the government selling the stock position they took in the new companies in exchange for their cash infusion. They could have continued to hold the stock if they chose to, but given that the TARP fund that was the source of the cash actually made money overall for the US taxpayer even with the loss on the auto stock, I think it was a wise decision for the government to sell. I never hear anyone applauding the government for making money on the overall bailout, only for the loss in stock value for GM. Seems somewhat disingenuous to me. BTW, Ford borrowed almost $6 billion from the government in 2009, and they are still paying that back.
DeleteAs far as green projects the same idea holds. If you want to criticize some for failing, you have to then also applaud the ones that succeeded. And if you want to base validity on whether money was made or lost by taxpayers you have to total up all the money given out and returned to taxpayers for all the projects, not just pick the ones that didn't pay back.
It would be like criticizing me for having a few stocks in my portfolio loose money last year even though overall my portfolio made 18%.