In the second presidential debate, Mr. Obama attacked early on, saying, “Governor Romney said we should let Detroit go bankrupt.”
Note to Obama fans: GM did go bankrupt – filing for Chapter 11 protection against its creditors on June 1, 2009. It’s what happened next that the president can take credit for – a handout of $49.5 billion in taxpayer money to GM, some $27 billion of which remains outstanding, and another $17 billion to its financial arm Ally Financial, which still owes $14.7 billion.
In other words, Obama didn’t save General Motors; American taxpayers did, with an assist from the Federal Reserve. While liberals rant about the bailouts of Wall Street, it is worthwhile noting that of the $417 billion in TARP funds spent to stabilize the economy, only $65 billion has yet to be repaid – and more than half of that is owed by GM and Chrysler. The latest TARP report from the Congressional Budget Office says that the government invested nearly $80 billion in those two auto giants and that taxpayers are still on the hook for roughly $37 billion.
In the same report, the CBO projects that handouts to Wall Street firms will ultimately net the government a cool $11 billion profit. They say the auto industry, on the other hand, will never pay back taxpayers. According to the congressional bean counters, $20 billion is gone for good.
Where did that money go? Mainly, it went to paying off debts owed by GM and Chrysler, and – in an historic distortion of our bankruptcy proceedings – to securing the pensions and livelihoods of UAW workers. It turns out the real debt was that of Mr. Obama to organized labor, which had ponied up some $400 million to help him defeat John McCain...
Infuriated yet? Well, hold on. Because the story is far from over. Zip on over to Liz Peek's excellent article in the Fiscal Times and finish reading "Obama’s Auto Bailout Was Really a Hefty Union Payoff."
And pass it on.