U.S. to lose $25 billion on auto bailout

Discussion in 'Politics' started by beretta304, Aug 13, 2012.

  1. beretta304
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    beretta304 BANNED

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    Treasury: U.S. to lose $25 billion on auto bailout

    By David Shepardson
    Detroit News Washington Bureau

    Washington -The Treasury Department says in a new report the government expects to lose more than $25 billion on the $85 billion auto bailout. That's 15 percent higher than its previous forecast.

    In a monthly report sent to Congress on Friday, the Obama administration boosted its forecast of expected losses by more than $3.3 billion to almost $25.1 billion, up from $21.7 billion in the last quarterly update.

    The report may still underestimate the losses. The report covers predicted losses through May 31, when GM's stock price was $22.20 a share.

    On Monday, GM stock was trading down 6 cents, or 0.2 percent, to $20.49. At that price, the government would lose another $850 million on its GM bailout.

    The government still holds 500 million shares of GM stock and needs to sell them for about $53 each to recover its entire $49.5 billion bailout.

    Treasury spokesman Matt Anderson said the costs were still far less than some predicted.

    "The auto industry rescue helped save more than one million jobs throughout our nation's industrial heartland and is expected to cost far less than many had feared during the height of the crisis," Anderson said.

    The Obama administration initially estimated it would lose $44 billion on the bailout but reduced the forecast to $30 billion in December 2009.

    Republican presidential candidate Mitt Romney has decried the losses on the auto bailout and insisted that forcing GM and Chrysler Group LLC to go through bankruptcy first would have saved taxpayers money.

    But President George W. Bush — who gave the automakers and their finance arms about $25 billion in his final weeks in office in bailout funds — said there wasn't time.

    Taxpayers incurred a $1.3 billion loss on the $12.5 billion bailout of Chrysler.

    The Treasury also has put on hold an initial public offering initially planned for last year in Ally Financial Inc. because of market weakness. The government holds a 74 percent majority stake in the Detroit auto finance company as part of its $17.2 billion bailout and has recovered $5.7 billion.

    GM CEO Dan Akerson told employees at a town hall meeting Thursday that the company was working to take actions to boost the automaker's sagging price.

    dshepardson@detnews.com



    From The Detroit News: Treasury: U.S. to lose $25 billion on auto bailout | The Detroit News | detroitnews.com
     
  2. Soggy in NOLA
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    Soggy in NOLA Platinum Member

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    Gee... who'd a thunk that letting a cabal of classroom theoreticians and Marxists tinker with a bankrupt corporation with a bad business model would turn out poorly?

    :lol:
     
  3. NYcarbineer
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    NYcarbineer Diamond Member

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    So the worst case scenario is that we saved 2 American industries at the cost of 3 months worth of Iraq war?

    That makes the argument that instead of going into Iraq in 2003, we should have started saving US businesses.

    btw, I wonder if they count the tax revenue generated by the saved jobs at GM when they make that calculation?
     
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  4. Leweman
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    Leweman Gold Member

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    "btw, I wonder if they count the tax revenue generated by the saved jobs at GM when they make that calculation?"

    It saved nothing ... Go learn something about bankruptcy, moron.
     
    Last edited: Aug 13, 2012
  5. Clementine
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    Clementine Platinum Member Supporting Member

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    But, but, one of Obama's slogans (and left talking point) is that GM is alive. Glad we could keep the company afloat for the wealthy unions even though it means we lose our ass. Hell, we lost money on Solyndra and a bunch of other green companies. Ain't throwing away money fun? It is when it's not yours you are playing with.
     
  6. Sinjorri
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    Sinjorri Senior Member

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    if thats the case, the iraq war saved lives, dont dems like saving lives? And by lives i mean pretty things, they are never out saving the tazmaian devil

    Tasmanian Devils Named Endangered Species


    but thats a whole other debate. But if the iraqi war can be saving lives, isnt that money well spent?
     
  7. eflatminor
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    eflatminor Classical Liberal

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    1) We didn't "save" anything. Bankruptcy has been a viable option for thousand of companies that emerged healthier.
    2) The cost of war is non sequiter. Regardless of what we spend on military, it does not justify the bailouts.
    3) We did create a tremendous moral hazard.
    4) We did screw over the bondholders
    5) We did screw over GM's competitors who could have taken market share.
     
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  8. Jarhead
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    Jarhead Gold Member

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    on the flip side...do they include the loss of government revenue with the Cash for clunkers deal that helped generate the sales for the industry.
     
  9. amrchaos
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    amrchaos Pentheus torn apart

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    Why not keep the stock and let the interest on them help pay for the bailout.

    Better to hold than sell at a lost anyway. GM is not going any where so holding until the stock rises again seems like a good policy here.
     
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  10. Vel
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    Vel Gold Member

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    But hey.. Obama says he wants to do to ALL industries what he's done to the auto industry. Good times folks.. good times
     
    Last edited: Aug 13, 2012

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