Bankruptcy

How Much Money Was Really Lost on the GM Bailout?

Of course cars and politics go hand in hand.

Last December, the US government sold its last GM shares. At the time, the US Treasury announced that taxpayers lost an estimated $10.3 billion. Altogether, the Bush and Obama administrations shelled out $50.2 billion in emergency aid to save GM from bankruptcy back in late 2008 and early 2009. On the plus side, GM is alive today as is Chrysler, not to mention their vast supplier network.

However, a Treasury Department auditor is now saying taxpayers really lost $11.2 billion on the GM bailout. So who did the faulty math here? Apparently, the government failed to notice it had "written off an $826 million 'advertisement claim' tied to the GM bailout" last March. The only reason why this error was discovered now is because the Office of the Special Inspector General for the Troubled Asset Relief Program was actually paying attention to the fine details. It’s called doing simple math. Still, what’s done is done and the price of not doing anything to save the automakers would have been much higher in the long run.

And for anyone who doesn’t believe cars and politics should go together (or even be a news topic), consider this: global governments have been regulating the auto industry for years, whether through emissions and/or safety standards or other means. Automakers routinely hire expensive lobbyists to further and secure its business interests in the halls of government. Whether we like it or not, that’s the way it’s been and likely always will be. The subject is simply too great for automotive publications to ignore.

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