GM is No Longer "Government Motors"

Politics

The controversy will never go away.

Four years after the US government saved General Motors from certain financial death thanks to a $49.5 billion federal bailout, the US Treasury has just sold off its remaining GM holdings. The brand is officially no longer "Government Motors." The decision to save GM as well as Chrysler will forever remain controversial, but certain facts cannot be denied: the bailout saved at least 1.2 million US jobs and prevented the collapse of the vast US auto parts supplier network.

If the latter had fallen, Ford, which didn’t require bailout cash, would have also found itself in serious trouble. However, the final sale of GM stock by the US government came with a price: a $9 billion taxpayer loss. In light of the government’s sale, GM stock has been surging in recent days. GM’s North American President, Mark Reuss defended the bailout, stating that "There are 10s of 1,000s of people who can now put food on the table. How can you put a price on that?" An independent study also found that the bailout preserved $39.4 billion in personal and social insurance tax collections in 2009 and 2010.

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The bailouts, if you recall, was started under former President George W. Bush and continued under President Obama. In hindsight, despite all the objections from the many naysayers, experts are concluding the government did the right thing. The bailout, aside from the taxpayer loss, saved two major American companies and countless jobs. The result of simply not doing anything would have sent the already fragile US and global economies into an even more serious depression.

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