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Considering the probably costs of letting GM close, 11 billion is not bad
The cost would be, increased medicare and Medicaid bills, welfare and UI payments not just to GM workers and retirees, but to dealership and suppliers as well
Considering the probably costs of letting GM close, 11 billion is not bad
The cost would be, increased medicare and Medicaid bills, welfare and UI payments not just to GM workers and retirees, but to dealership and suppliers as well
But but but... in this recent progressive leaning thread which quotes a Center for Automotive Research study (with no link I might add), Conservatives are challenged to admit that the GM deal has been fully paid off! What a conundrum!
Most would agree that the other option, letting them pursue bankruptcy, would have cost at least 4 times that amount from lost taxation, UI benefits and added social program spending. The lesson learned should be that too big to fail really means very painful to bail. While the profits are mostly private, the losses are mostly public when big business gets too big.
MIGHT have, not would have. And only because the govt forces us to bail out people as well as businesses. We dont have to have federal UI or social program spending. And what about the cost to creditors?
The US lost $10 billion on the GM bailout. What do you think about that?
Treasury sells last shares in GM, posts a loss of $10 billion
Danielle Douglas DEC 9
The government will lose $10 billion on the deal, which kept the automaker from collapsing.
"The Treasury Department announced Monday the sale of its remaining shares in General Motors, closing the books on one of the most controversial government interventions of the financial crisis. The government will lose $10 billion on the deal, which kept the automaker from collapsing."eace
The gov't forces the bailouts but the social spending is somehow optional? I think you have it backwards there. Special legislation was needed for the bailouts, the social spending is largely "mandatory" and is increased annually as a routine "budget" matter.
Given the fact that the GOP induced government shutdown over nothing cost the country about $24 billion, and we have nothing to show for it....I think assuring the US auto industry for decades is quite a bargain at $10B.
Sure, some money might have been lost from the real loans they gave out, but I think they will have saved the government a lot of more than that due to not having to pay unemployment benefits for thousands upon thousands upon thousands of car workers and people who supply stuff to the car industry. And a lot of people are dependent on that money. Whether it is the local shops who kept their customers, banks having to take back homes from people who would have lost their jobs. The amount that is going to be saved by not having let the auto industry collapse will be much more than 10 billion IMHO.
Sure, some money might have been lost from the real loans they gave out, but I think they will have saved the government a lot of more than that due to not having to pay unemployment benefits for thousands upon thousands upon thousands of car workers and people who supply stuff to the car industry. And a lot of people are dependent on that money. Whether it is the local shops who kept their customers, banks having to take back homes from people who would have lost their jobs. The amount that is going to be saved by not having let the auto industry collapse will be much more than 10 billion IMHO.
That's less than the 13.4 billion President Bush gave them.The US lost $10 billion on the GM bailout. What do you think about that?
Treasury sells last shares in GM, posts a loss of $10 billion
Danielle Douglas DEC 9
The government will lose $10 billion on the deal, which kept the automaker from collapsing.
"The Treasury Department announced Monday the sale of its remaining shares in General Motors, closing the books on one of the most controversial government interventions of the financial crisis. The government will lose $10 billion on the deal, which kept the automaker from collapsing."eace
That's less than the 13.4 billion President Bush gave them.
http://www.nytimes.com/2008/12/20/business/20auto.html
It doesnt have to be. We should let GM fail, and we should let people fail. What youre basically saying is because the govt has chosen to take care of people from cradle to grave, we're screwed either way.
Not spending money costs 24 billion?
Using that logic, the federal govt should never let any business fire an employee due to financial reasons.
The Center for Automotive Research, an Ann Arbor, Mich., think tank, issued an updated report Monday saying that if the government hadn't intervened and GM went out of business, nearly 1.9 million jobs would have been lost in 2009 and 2010. Federal and state governments also would have lost $39.4 billion in tax revenue and payments made for unemployment benefits and food stamps, the study said.
What a waste of money. This is a great example of squandering tax payer dollars and all we did really was to save union jobs with bloated contracts that will make GM fail again. If GM had been allowed to go bankrupt and these contracts could have been renegotiated so that the company stood a long term chance of surviving and us tax payers would not be 10 billion in the hole.
It's a fair point but we'll never know. I think the industry could have been saved by good old fashioned bankruptcy too.eace
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