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Tipsheet

Government Says It Lost "Only" $9.26 Billion On Auto Bailout

A Department of the Treasury report this week released some of its final numbers on the auto industry bailout, with good news: "only" $9.26 billion was flushed down the drain bailing out America's labor union-dominated auto industry.
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As the Detroit Free press reports:

Taxpayers lost $9.26 billion on the U.S. government's automotive industry rescue program, according to a final tally released by U.S. Treasury this week... The government said it recovered $70.42 billion of the $79.68 billion it gave to General Motors, Chrysler, Ally Financial, Chrysler Financial and automotive suppliers through the federal Auto Industry Financing Program.

The government lost money, but far less than initially expected when the program was launched in 2009.

Of course, President Obama himself was consistently telling Americans that "GM has repaid every taxpayer dollar my administration" lent to them in the auto bailout program. That is, of course, a blatant lie.

And the Treasury Department isn't exactly the most reliable source of numbers here, considering they're led by political apointees beholden to President Obama. The Congressional Budget Office, for example, has historically put out different numbers than Treasury, showing the bailout to be in worse shape. The nearly $10 billion loss might be understating it.

The real test will be if GM and the other companies continue to survive or continue to need bailouts. As Jim Pethokoukis wrote for AEI last year:

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Bailing out a failing company is a lot easier than turning around a troubled company so it once again makes a quality product... Washington didn’t save GM, if by “GM” you mean an innovating, value-adding, self-sustaining automaker. That’s just not something government really knows how to do.

GM has proved to be in dire straits. They had a disastrous recall in 2014, and they've struggled to produce midsize cars that compete even close to the same level as Japan's leading Camry and Civic products. Maybe we'll end up having lost "only" $10 billion. In a counterfactual world, though, the U.S. automakers might already be producing beter products. And in the real world, we may have just wasted a truckload of money delaying the inevitable.

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