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Although the debate on this will continue as long as people have opinions on it, the fact is that overall the federal backed loans worked, and taxpayers actually made money on the deal.

Key points:

* GM got $49.5 billion, and the Feds got back $39 billion....but GM's finance arm turned the Feds (aka: you the taxpayer) a $2.4 billion profit.

* The Feds fared far better with Chrysler, loaning $12 billion and getting back $10.7 billion....but the loss was all on paper since the Feds essentially sold their shares of Chrysler stock (the UAW actually bought the company), as opposed to GM where they actually bought the company at a bankruptcy sale.

* Although the Feds (aka: Taxpayers) lost $10 billion overall saving the auto industry, they gained over $17 billion in 2009 alone......just from GM alone in income taxes that would have been lost due to the 1.2 million jobs from General Motors alone shutting their gates.

* The entire TARP program cost the US taxpayer $426.4 billion.........but the US taxpayer recovered $441.7 billion dollars, meaning the program as a whole made the taxpayer $15 billion, saved what would have been at best a $16 billion hole blown into the federal deficit annually (on top of the initial 17 billion), but even more ominously, saved taxpayers from what would have been an government budget disaster when the Feds would have had to pay out through the Pension Benefit Guaranty Corp., the government entity that insures pensions.....something that the rest of us would have had to see tax burdens rise in order to pay for, or else see a bigger hole blown through the budget deficit.

Bottom line.....it actually did work.

http://www.thedetroitbureau.com/2014/12/government-lost-9-26-billion-saving-auto-industry/
 

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Although the Feds (aka: Taxpayers) lost $10 billion overall saving the auto industry, they gained over $17 billion in 2009 alone......just from GM alone in income taxes that would have been lost due to the 1.2 million jobs from General Motors alone shutting their gates.
That sounds like company math to me. That 17 billion that they claimed the government would have lost is probably assuming not a single one of those 1.2 million people would have found another job.
 

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That sounds like company math to me. That 17 billion that they claimed the government would have lost is probably assuming not a single one of those 1.2 million people would have found another job.
Normally that would be spot on, however considering the state of the economy at the time its highly probable that those people wouldn't find a job right away. What would have made it worse is this economic impact would not be spread evenly around America but concentrated probably mostly in the mid west.
 

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Normally that would be spot on, however considering the state of the economy at the time its highly probable that those people wouldn't find a job right away. What would have made it worse is this economic impact would not be spread evenly around America but concentrated probably mostly in the mid west.
Probably, or most likely, would have spread to first and second tier suppliers as well, which, would have affected Ford, European, and Asian brands as well.
 

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Normally that would be spot on, however considering the state of the economy at the time its highly probable that those people wouldn't find a job right away. What would have made it worse is this economic impact would not be spread evenly around America but concentrated probably mostly in the mid west.
I agree with you but my guess is their numbers might be a bit inflated and represent no one getting another job. Certainly some people would have found gainful employment. I'm pretty sure 1.2 million jobs wouldn't have been lost in the midwest alone, those jobs are spread around the country and farther.
 

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That sounds like company math to me. That 17 billion that they claimed the government would have lost is probably assuming not a single one of those 1.2 million people would have found another job.
How many would have in a completely decimated area where not only GM had closed , but all the ancillary businesses from suppliers and direct support, down to the coffee shops, lunch counters, stores, etc. all gone too?

No, it was money well spent and the reasons for that are all around us.
 

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How many would have in a completely decimated area where not only GM had closed , but all the ancillary businesses from suppliers and direct support, down to the coffee shops, lunch counters, stores, etc. all gone too?

No, it was money well spent and the reasons for that are all around us.
I'm not disagreeing with that fact. I think the bailout was a no brainer because of the economic enormity of it.

On the other hand I don't really trust any numbers when they don't reveal how they were figured, especially when the government is involved.
 

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That sounds like company math to me. That 17 billion that they claimed the government would have lost is probably assuming not a single one of those 1.2 million people would have found another job.
Yes but you're missing the actual issue. Even if 25% of them got other jobs - that is not newly created jobs. They would have taken jobs that 300,000 other unemployed would have gotten instead of them. So you have to count the 300,000 unemployed that had nothing to do with GM et al that remained unemployed because sacked GM workers would have taken the jobs they otherwise would have gotten.

So net/net it's still 1.2 million in tax receipts no matter how fungible the workforce...



;)
 

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Yes but you're missing the actual issue. Even if 25% of them got other jobs - that is not newly created jobs. They would have taken jobs that 300,000 other unemployed would have gotten instead of them. So you have to count the 300,000 unemployed that had nothing to do with GM et al that remained unemployed because sacked GM workers would have taken the jobs they otherwise would have gotten.

So net/net it's still 1.2 million in tax receipts no matter how fungible the workforce...



;)
I guess that's true if all those 300,000 unemployed people are actually still looking for employment.

You also have assume that none of the 1.2million decided to make a change and create their own way in life by starting their own business and actually creating job opportunities.

I know several people who used getting fired/laid off as a catalyst to start their own business.
 

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I guess that's true if all those 300,000 unemployed people are actually still looking for employment.

You also have assume that none of the 1.2million decided to make a change and create their own way in life by starting their own business and actually creating job opportunities.

I know several people who used getting fired/laid off as a catalyst to start their own business.
That's true, so long as their business success didn't eat into someone else's business causing either under-employment of another self-employed person, or a job lay-off (both of which would reduce income tax receipts for a net/net nullification).

Of course it could also be argued that if GM failed then other American auto factories would have picked up the slack and thus employed more people - thus countering some of the GM job losses.

That certainly would be true in the long run, but given they are referring only to 2009 tax receipts , and given all manufacturers had a glut of cars through 2009 and beyond, that probably would not have changed things for that year much at all.



;)
 

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I agree with you but my guess is their numbers might be a bit inflated and represent no one getting another job. Certainly some people would have found gainful employment. I'm pretty sure 1.2 million jobs wouldn't have been lost in the midwest alone, those jobs are spread around the country and farther.
While it won't be the mid west alone, they will be hit really hard... dealer networks will be hit really hard as well.....
 

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I agree with you but my guess is their numbers might be a bit inflated and represent no one getting another job. Certainly some people would have found gainful employment. I'm pretty sure 1.2 million jobs wouldn't have been lost in the midwest alone, those jobs are spread around the country and farther.
Even if they all got jobs the Government would have lost tax revenue during the time it took them to get re-employed. Even 20% of 1.2 million peoples weekly tax, for one or two weeks, would be a fair amount I would think seeing they would be workers from all wage/salary levels within the company.
 

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That's true, so long as their business success didn't eat into someone else's business causing either under-employment of another self-employed person, or a job lay-off (both of which would reduce income tax receipts for a net/net nullification).

Of course it could also be argued that if GM failed then other American auto factories would have picked up the slack and thus employed more people - thus countering some of the GM job losses.

That certainly would be true in the long run, but given they are referring only to 2009 tax receipts , and given all manufacturers had a glut of cars through 2009 and beyond, that probably would not have changed things for that year much at all.



;)
If anything GM going under would cause an auto parts shortage for other operations in North America as many suppliers would have gone down too. This would have made things worse for the existing auto makers as well as the even further drop in vehicle demand caused by the massive layoffs.

The prospect of this was enough to cause Bush to via executive order bail out both GM and Chrysler (stating he wasn't going to be a Hoover).
 

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Too big to fail for sure! Is there an official metric by which this is measured, so that next time there's no need for long-winded debate? Apply a formula, calculate the exact same things as the original poster here, and make it a GO / NO GO decision, and skip the silly hearings and grovelling for money.
 

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Too big to fail for sure! Is there an official metric by which this is measured, so that next time there's no need for long-winded debate? Apply a formula, calculate the exact same things as the original poster here, and make it a GO / NO GO decision, and skip the silly hearings and grovelling for money.
Come on..... How often do you get to make corporate leaders grovel? That's worth the price right there... :D





;)
 

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Although the debate on this will continue as long as people have opinions on it, the fact is that overall the federal backed loans worked, and taxpayers actually made money on the deal.

Key points:

* GM got $49.5 billion, and the Feds got back $39 billion....but GM's finance arm turned the Feds (aka: you the taxpayer) a $2.4 billion profit.

* The Feds fared far better with Chrysler, loaning $12 billion and getting back $10.7 billion....but the loss was all on paper since the Feds essentially sold their shares of Chrysler stock (the UAW actually bought the company), as opposed to GM where they actually bought the company at a bankruptcy sale.

* Although the Feds (aka: Taxpayers) lost $10 billion overall saving the auto industry, they gained over $17 billion in 2009 alone......just from GM alone in income taxes that would have been lost due to the 1.2 million jobs from General Motors alone shutting their gates.

* The entire TARP program cost the US taxpayer $426.4 billion.........but the US taxpayer recovered $441.7 billion dollars, meaning the program as a whole made the taxpayer $15 billion, saved what would have been at best a $16 billion hole blown into the federal deficit annually (on top of the initial 17 billion), but even more ominously, saved taxpayers from what would have been an government budget disaster when the Feds would have had to pay out through the Pension Benefit Guaranty Corp., the government entity that insures pensions.....something that the rest of us would have had to see tax burdens rise in order to pay for, or else see a bigger hole blown through the budget deficit.

Bottom line.....it actually did work.

http://www.thedetroitbureau.com/2014/12/government-lost-9-26-billion-saving-auto-industry/
So... they lost $10B saving the auto industry, but made $15B overall... so where did that $25B come from?
 
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