Terryallan wrote:
Actually they did not pay it all back. We went 11.2 Billion in the hole on the deal. seems GM paid back a huge part of the bailout with stocks. and the stocks are not worth enough money to cover the Bailout. so again. The US taxpayer took a 11.2 billion dollar bath. GM went bankrupt, screwed it's stock holders, and there we are.
Most of the money invested was in new GM, not the old. There was very little government money left outstanding in old GM before the bankruptcy. The government ended up writing off on a little over $800 Million in old GM. The Billions that were lost comes from the purchase of stock in new GM. The government themselves decided to buy the stock in new GM along with Canada vs. loaning GM more money. This was all done before new GM's IPO. The government experienced such a loss mostly because of when they decided to sell off the shares.
Really if the government had held onto the GM shares they could've actually profited from them eventually. But that wasn't the goal of the program. They wanted to get as much money back as soon as they could. Plus they could already see that they were not going to take a huge hit on TARP anyway, so selling the shares at a loss really wasn't a big deal.
The goal was to try to save the failing sectors to prevent catastrophic economic collapse. Banks, housing, auto, and manufacturing were all failing. Lots of people think that the bailout was just a big handout from the government, but really it was a bunch of loans.
There were some losses and some gains, but in the end it worked out to be a win win for the government. Although the industries have had some rough patches, they've mostly bounced back. The government ended up coming out ahead moneywise. As of today, of the $622 Billion that given out the government has received $698 Billion back. In end the government has realized a $76.6 Billion profit.
