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A recently released analysis by the Center For Automotive Research ( https://custom.cvent.com/FC2043E4E1084DD49249D452E4CA74FE/files/634044
7b16954722a21798240e57acb3.pdf) points out that the bailout saved the country an enormous amount in both money and human resources. In its conclusions, the report says:

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Our results show the U.S. government saved or avoided the loss of $105.3 billion in transfer payments [i.e., unemployment benefits and Medicaid 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. https://custom.cvent.com/FC2043E4E1084DD49249D452E4CA74FE/files/634044
7b16954722a21798240e57acb3.pdf]

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The figures bear repeating: we avoided paying out $105.3 billion and saved $284.4 billion in personal income, on which income taxes have been paid. We saved the equivalent of 768% of the investment. To say nothing of the 2.6 million jobs rescued in 2009 alone. In addition, about 600,000 retirees from both GM and Chrysler would have faced reduced pensions and the loss of health benefits without the bailout.

But the GOP wants to focus on the $11.8 billion that the sale of stock didn’t recoup. And in their condemnation there is, of course, no acknowledgement that the beginnings of the auto bailout took shape in 2008, under the George W. Bush administration.

The CAR report further concludes that, without government action, what remained of the auto industry would have shifted to the Southern states, essentially gutting the upper Midwest of its primary industries. Ohio, Michigan, and Indiana would still be haunted by double-digit unemployment. The support industries for “automotive research, product development, and tooling” would probably have become centered in other countries. “This important economic base would have been lost to the U.S. economy, perhaps forever.”

But in their own analysis, the GOP wants to hammer the administration on the $11.8 billion loss from the sale of stock. The CAR report has something to say about that, too:

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We expect that much will be made of the shortfall between the total aid granted to GM and the proceeds from the government’s sale of stock. The Center for Automotive Research (CAR) maintains that such a simple calculation represents the crudest form of partial analysis. Any complete cost-benefit assessment of the federal assistance to GM in its restructuring must consider the total net returns to the public investment in GM in the U.S. economy because that is an actual role of the federal government as defined by Congress. https://custom.cvent.com/FC2043E4E1084DD49249D452E4CA74FE/files/634044
7b16954722a21798240e57acb3.pdf

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GM and the larger auto industry are financially sound because the administration did its job effectively. Without the support of the GOP. Once again.

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But the GOP wants to focus on the $11.8 billion that the sale of stock didn’t recoup. And in their condemnation there is, of course, no acknowledgement that the beginnings of the auto bailout took shape in 2008, under the George W. Bush administration.

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