Bin Laden is dead and General Motors is alive, as Vice President Joe Biden likes to put it, but the American taxpayer is still on the hook for $25 billion.
The bailout of the American automobile industry, widely touted during the Democratic National Convention, initially cost $80 billion or about $30,000 per automotive worker, The Washington Post
reported. GM and its former financing firm still owe the government $25 billion.
The government still owns 500 million GM shares with the stock price at about half of what it needs to be for the government to be repaid, according to the Post.
The bailout of GM and Chrysler also cost thousands of jobs at dealerships across the country. “The elimination of thousands of GM and Chrysler dealerships in 2009 was unnecessary,” Bailey Wood, a spokesman for the National Automobile Dealers Association told the Post. “Sadly, this action threatened more than 100,000 jobs.”
Nonetheless, the bailout, begun in the last days of the Bush administration and accelerated under President Barack Obama, pulled the industry back from the brink and prevented other economic chaos. Since the bailout, the auto industry has added 250,000 jobs and sales are up and Chrysler has repaid its loans, the Post reported.
Economists Mark Zandi, of Moody’s Analytics, and Alan Blinder, of Princeton University, writing in an analysis, said, “Without financial help from the federal government, all three domestic vehicle producers and many of their suppliers might have had to liquidate many operations, with devastating effects on the broader economy, and especially on the Midwest,” the Post reported.
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