Larry Summers, head of the National Economic Council, said today that the Obama administration expects to recover “most, if not all” of the $50 billion bailout it provided to General Motors. At the current pricing of GM bonds, taxpayers are expected to lose about $10 billion on their investment in GM.
Defending the $85 billion bailout of the auto industry, Summers said that the industry cut 400,000 jobs in 2008. He said that the Bush administration had estimated the losses to total 1.1 million if the government didn’t step in to help GM and Chrysler. Summers said that those number of job losses would have added a number of other problems.
“They meant state and local budgets pushed to insolvency. They meant rising crime. They meant people dying young(er) than they other(wise) would have,” Summers said.
The Obama administration said yesterday that the U.S. government would assume at least a $1.6 billion loss on its $4 billion loan to Chrysler in Jan. 2009.
Most recent public estimates indicate that the government will lose about $30 billion on its bailout of GM, Chrysler and GMAC (now known as Ally Financial).
– By: Stephen Calogera
Source: Detroit News
Photo Credit: Official White House Photo by Pete Souza