Friday, July 22, 2011

The Bailout: Chrysler buys out U.S. Taxpayers on their 6% stake.

Ford Model T Assembly Line - 1913
(Picture from Detroit Public Library)

One of the issues that Tea Partiers love to hammer away at is the bail-out of private business by the Government since 2008.  (When your only tool is a hammer, all policy issues begin to look like nails.)

Yesterday I posted about the status of the TARP recoveries from the U.S. Banks, and how the U.S. taxpayers had actually turned a profit on the bailout of banks. I mentioned that the total TARP bailout package authorized at $700 Billion dollars might lead to a total loss in the range of $15-20 Billion dollars, primarily from the bailout of GM, Chrysler and AIG Insurance.  At $25 Billion dollars in cost to the taxpayers, the cost of the "fix" to America's economy resulting from the bursting of the housing bubble will be substantially less than the cost to taxpayers of "fixing" the Savings and Loan crisis resulting, in part, from financial deregulation under President Reagan.  The final costs to the US taxpayers from the Savings and Loan Crisis was over $125 Billion.

Yesterday's Washington Post reports on the close-out of the rescue of Chrysler:
In all, the government has recovered $11.2 billion of the $12.5 billion it committed to the Chrysler rescue, the Treasury said, or about 90 percent of the money.  . . .
The company repaid the U.S. loans in May. In the sale on Thursday, Fiat, the Italian automaker, paid $500 million for the government’s six percent stake in the company. Details of the agreement had been released last month, but Thursday marked the government’s official exit.
No intelligent politician needs to run away from TARP. 

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