U.S. taxpayers lost $9.3 billion on the government’s bailout of auto companies

Article by Andrew Christian, on December 31, 2014

The United States Department of Treasury has finally sold its remaining stake in Ally Financial Inc., resulting to a $9.3-billion loss for US taxpayers from its bailout of the company, General Motors Co. and Chrysler Group. According to department data, the Treasury spent $79.7 billion for the bailout, but only managed to generate $70.4 billion from selling the government’s stakes in those companies.

The last of those stake sales occurred this month as the US government disposed of its remaining $1.28 billion stake in Ally. The three companies received huge rescue funds from the emergency government program as a way to avert their total collapse in 2008, which was feared could lead to a deeper economic crisis.

The bailout had Ally receive $17.2 billion from the program, resulting to a 74-percent stake for the Treasury. Following the stake sale, the government now owns none of Ally.

Treasury Secretary Jacob J. Lew remarked that the emergency government program was a crucial part of the Obama administration’s effort to halt the financial crisis and protect the economy from “slipping into a second Great Depression.”

The government’s Troubled Asset Relief Program in total spent around $426.6 billion to bail out a number of US companies like Citigroup Inc., Bank of America Corp. and American International Group Inc. The Treasury has received $441.7 billion in repayments and other income from the program.

Topics: united states

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