The Detroit News posted a story today that a report by the Treasury Department has estimated that the government will lose more than $25 billion on the $85 billion auto bailout. That is almost a third of the cost of the bailout!
The article states:
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.
This is how much it cost the taxpayers to avoid General Motors’ going through a structured bankruptcy. The government bailout violated the basic bankruptcy laws. The bailout was nothing more than the taxpayers giving the company to the unions. This sort of activity needs to be avoided in the future!