Barack Obama has been touting the mantra that the automobile industry has been great proof that his policies work and have put people back to work. He was so confident in it that one of his first campaign ads was promoting the GM bailout. Last week he even proclaimed he wanted to do the same thing with every manufacturing industry in America. Well maybe Obama spoke a little bit too soon.
The Detroit News reports,
The Treasury Department says in a new report the government expects to lose more than $25 billion on the $85 billion auto bailout. That’s 15 percent higher than its previous forecast.
In a monthly report sent to Congress on Friday, the Obama administration boosted its forecast of expected losses by more than $3.3 billion to almost $25.1 billion, up from $21.7 billion in the last quarterly update.
The report may still underestimate the losses. The report covers predicted losses through May 31, when GM’s stock price was $22.20 a share.
Now taxpayers lost $1.3 billion on the Chrysler bailout.
GM still owes taxpayers an estimated $42 billion, according to an inspector general’s report.
GM owes $27 billion on the nearly $50 billion it received from the auto bailout and Ally Bank, the company’s lending arm, owes $14.7 billion of the $17.2 billion taxpayer-funded bailout it received.
This is the problem when the government gets involved in private businesses with taxpayer’s money. It never is good for the taxpayer and you can bet your bottom dollar that Obama will be willing to throw more money their way. But it isn’t just Obama.
Presumptive GOP nominee Mitt Romney decried the losses on the auto bailout and insisted that letting GM and Chrysler go through bankruptcy first, would have saved the taxpayer’s money and I agree it would have. There are two problems though. The first is that if you read the article Romney was still willing to provide government money to the auto companies post-bankruptcy. Second, Romney just put a guy on his ticket that voted for the bailout. Paul Ryan voted for the auto bailout. Not only that, but he also voted for TARP which funded that auto industry. He did not support letting them go through bankruptcy.
Now, according to Charles Payne, from the Fox Business Network, it seems that GM is on the verge of bankruptcy and will need a bailout in the near future. Payne points out the numbers are all down both in Europe and America, the stock is down and the forecast is very bleak. To top it off the Chevy Volt is failing miserably, according to the Wall Street Journal.
I’m guessing we, the taxpayers will be the losers in all of this and I’m wondering if this will even come up in debate, seeing that both sides have a bit of egg on their face when it comes to bailing companies out with our money. I do think, however, that Joe Biden will need to take that idea about “GM is alive and Osama bin Laden is dead” and put that back in his pocket.