Treasury Department: Taxpayer Losses On Auto Bailout Expected To Hit $25 Billion
I’ve never understood the Obama administration’s touting of the General Motors bailout as a public policy victory. “Is there any way you could provide $85 billion to an industry and it wouldn’t be in better financial shape?” asks Jim Geraghty. No kidding.
But now comes news from the Treasury Department that the taxpayers are set to lose $25 billion on the auto bailouts:
However, reality threw a wrench into the works yesterday, as Treasury reported that the losses on the bailout for taxpayers have grown an additional $3 billion:
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 fell $0.07, or 0.3 percent, to $20.47. 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. At the current price, the Treasury would lose more than $16 billion on its GM bailout.
To be fair, this was Bush’s bad idea first, but the Obama administration seized it and expanded upon it and now they own it. But not only do they own it, but apparently Democrats are planning on hitting Republican opposition to the auto bailouts at their national convention.
It seems to me that criticizing bailouts that cost the taxpayers billions is a good thing.
Tags: bailouts, Barack Obama, general motors
