Washington’s $49.5 billion bailout of General Motors saved at least 1.2 million jobs, protected hundreds of thousands of pensions and earned about $40 billion in tax collections, turning what some have dubbed a poor investment into a whopping bang for Uncle Sam, according to a new report.
The bottom line, according to the Center for Automotive Research study heralded by GM: When the full picture of what was at stake is considered, including the potential for millions to be put out of work, the government actually made out big time.
And when bailed-out Chrysler is included, the study found that bailouts to both automakers “avoided loss to the U.S. of $105.3 billion in transfer payments and personal and social insurance tax collections. Additionally, 2.6 million jobs were saved in 2009 alone and $284.4 billion in personal income was preserved over 2009-2010.”
The study, “The Effect on the U.S. Economy of the Successful Restructuring of General Motors,” addresses the estimates of how much taxpayers have yet to recover in cash from GM and Chrysler, a total of $13.7 billion.
But rather than just focus on that amount, the report points to how much in tax receipts and jobs would have been lost had the bailouts not been successful.
And when the math is done, the report suggests that the U.S. scored big by not losing big.
“If the final net cost of this investment is $11.8 billion in unrecovered funds in GM and the reported loss of $1.9 billion in Chrysler, this net investment would total $13.7 billion in Treasury funds. Our results show the U.S. government saved or avoided the loss of $105.3 billion in transfer payments and the loss of personal and social insurance tax collections — or 768 percent of the net investment. Additionally, 2.6 million jobs were saved in the U.S. economy in 2009 alone and $284.4 billion in personal income saved over 2009-2010,” said the report.Paul Bedard, the Washington Examiner's "Washington Secrets" columnist, can be contacted at firstname.lastname@example.org.