The GM Bailout was it worth it?

[asterism]

Now that the dust has settled, the GM bailout can be objectively measured. Was it worth it?

It's Official: Taxpayers Will Lose Big on the GM Bailout - Rick Newman (usnews.com)

But once the government sells its shares, GM will still be tainted by the fact that it failed to pay back all the taxpayer money used to save it back in 2009. GM initially got $49.5 billion from the U.S. government, and it paid back $23.1 billion of that after its stock went public in 2010. That left $26.4 billion GM still owed the government.

GM's shares have been trading around $25. The buyback will occur at a share price of $27.50, or a total of $5.5 billion for 200 million shares. But for taxpayers to get their money back, the government would have to sell at an average price of about $52. So by simple math, the total break-even price for those first 200 million shares would be about $10.4 billion. The $5.5 billion sale price amounts to roughly a $5 billion loss for taxpayers.

That's just the loss on the stock. There's more:

Its $67 billion bailout also involved three companies, the old GM, the GM that emerged out of bankruptcy reorganization and auto financing arm GMAC, which is now Ally Financial.

• The new company received $6.7 billion in secured loans. In April 2010, GM repaid them with interest — and touted it had "repaid our government loan, in full, with interest, five years ahead of the original schedule." But billions of dollars more had been converted to a 61 percent stake in the new company, said James Cain, financial news manager for GM. That stake is now down to 32 percent of the company’s common stock. The question is how much that stock will earn taxpayers to offset $27 billion not yet recouped from old and new GM. A third of GM’s entire stock value as of March 19, 2012, was just $13 billion. (Check its current market capitalization.)

PolitiFact | President Barack Obama campaign video says auto companies 'repaid their loans'

In mid-December of 2008, the Bush administration stepped in to lend General Motors and Chrysler billions to prevent impending bankruptcy. Subsequently, the Obama administration kept the two companies afloat as they filed for bankruptcy protection. See below for details on outstanding loans to each company.

General Motors Mich. Dec. 29, 2008 [amt received] $50,744,648,329 [amt recovered] $28,353,765,982

Q: Did General Motors repay its TARP loan from the Treasury with other TARP money?

A: Yes. GM repaid the loan portion of the automaker bailout ahead of schedule, with interest. It used TARP money it had already received but hadn’t spent. And taxpayers are still stuck with GM stock that isn’t worth what was paid for it.

FactCheck.org : General Motors? Debt

So it appears that the government took a bath on GM. But...


$14 Billion in direct federal income taxes are paid by the auto industry. $69 Billion in federal income taxes from spinoff jobs.

http://www.cargroup.org/assets/files/final_tax_revenues_apr_2012_v3.pdf

So does the revenue now being collected offset the cost?

 

[TNHarley]

No never! Whats that? 20,000 a child? My poor kid Hope he will have some smarts

 

[Oddball]

Oboingo butt sniffers don't give a fuck....Gubmint got lots and lots o' money.

They'll just get more from Barry's stash.

 

[Morganist]

I think it was. But I don't know if they could do it again.

 

[RightNorLeft]

For me, id rather give the cash to GM to keep americans working than to lets say give hundreds of millions to palestinians that hate us, or the myriad of "other" places we give alot more cash too.
Personally id rather give it to gm to keep americans working than to give subsidies to big Oil and Farms so they can stick it in their pockets after they stick it in all our ass's at the pump. Alot of different ways to look at this.

 

[Oddball]

How do you look at the taxpayer losing over half of the "investment" thrown at GM stock, you fool?

 

[Politico]

No. Their cars still suck.

 

[TheOldSchool]

The quality of American cars right now is really high. Look at Cadillac, Buick, Chevrolet, Ford, Jeep, Dodge, etc. After years of mediocrity they are catching up and even overtaking their competitors. We've had some cool shit come out lately. Is that 100% because of the bailout? No but it definitely helped. The state of the American car manufacturer is trending well upwards. That's good for our country. So yes the bailout was worth it.

And if you disagree with that then I hope you can at least be happy that the Corvette still exists.