SAN FRANCISCO (press release)—Who can forget the Democrats led by Vice President Joe Biden at their national convention in 2012 promoting the idea that Bin Laden was dead and Detroit was alive and thriving thanks to the Obama administration? In reality, Osama Bin Laden is dead, but the federal bailout of the U.S. auto industry has cost American taxpayers $10 billion, new figures disclose.
Ironically, the U.S. Treasury Department actually announced last December the official end of the automobile industry bailout after loans given to General Motors and Chrysler had been “repaid to the government’s satisfaction.” It may be to the government’s satisfaction, but what about the American taxpayer?
The initial bailout was inaugurated in January 2009, at the onset of the Obama administration, as part of the Troubled Asset Relief Program. It was designed to combat the subprime lending crisis. The Auto Industry Financing Program loaned $79.69 billion to GM and Chrysler and their in-house financing companies assuming the government would be paid back in full. The operative word is “assuming.”
Most taxpayers are unaware that a portion of funds were used to purchase majority shares of the companies. That, in effect, nationalized the auto companies, the Heartland Institute observed in a report on the end of the bailout. During this period, the government sold Chrysler to Italian automaker Fiat. The Treasury Department provided $17.2 billion in public loans to GM’s financing company, now known as Ally Financial. The company made its final repayment on December 19.
That leaves the bottom line for taxpayers to ponder: the American public recovered only $70.42 billion of the $79.69 billion loaned through the bailout program, a loss of $9.3 billion, about $65.75 per taxpayer.
Meanwhile, the Treasury Department backpedaled when confronted by the media that actually researched the Obama administration claims of solvency. Treasury defended itself by saying, “While the auto industry rescue resulted in a cost of $9.3 billion to the government, the cost of a disorderly liquidation to the families and businesses across the country that rely on the auto industry would have been far higher.” Huh?
Treasury continued, “The government’s actions not only saved GM and Chrysler but they saved many businesses up and down the supply chain.” That is a claim that can easily be refuted if the mainstream media showed any interest, which they don’t. The Obama administration may say Osama Bin Laden is dead with credibility, but to say Chrysler and GM are “alive” is only by what the government considers “alive.”