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Study: Billions In Industry Bailout Funds Won't Be Repaid

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U.S. Capitol at dusk

U.S. Capitol at dusk

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In a result that surprises no one but ought to shock us all, a congressional panel has released findings that tens of billions of dollars of the U.S. government's bailout of the auto industry won't be repaid.

The report, undertaken by the Congressional Oversight Panel, says that about $5.4 billion of the money borrowed by Chrysler won't be repaid, and it is "highly unlikely" that the government's 61% stake in General Motors will fully repay the $50 billion in funds the company received.

Not all of the money has disappeared, however. Chrysler is good for just over $5 billion of the funds lent, and as long as GM's stock improves in value, some of the money will be repaid. Out of the grand total of $74 billion loaned to the industry, about $23 billion of the funds will be subject to what the report calls "much lower recoveries," though exactly what that means isn't conclusive.

The bottom line: don't expect to see much of the funds given to the auto industry coming back into government coffers. Not that you did in the first place.

By way of comparison, however, the banking industry has only repaid about $68 billion of the $700 billion in government TARP funds issued.

[Congressional Oversight Panel]

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Comments (16)
  1. Didn't see that one coming. So the same congress that doled the money now figured out that its not coming back. That sounds perfectly responsible.
     
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  2. Can someone check to see if Glenn Beck's head is still attached? Or has it gone into low geosynchronous orbit about now?
     
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  3. Big surprise!
    As if anyone really expected a free handout to a failure like GM to be repaid. I'd be surprised if GM doesn't fall back into bankruptcy before the end of year.
     
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  4. I'm bankrupt and need a bail out. Please, gov't?
     
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  5. Not a surprise at all. I will agree that the bailout served its purpose in damage control, keeping dealerships, suppliers, etc. going and probably averting the more dire consequences if they would have been allowed to fail completely, but it does not set a good example.
     
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  6. This is why government does not belong in business. Can't wait to see the health care mess they create.
     
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  7. definitely was a tough call. in the end, i think i support the government stepping in - in light of the entire chain of industries reliant on the auto industry. but not a black and white issue in the least. obviously a terrible call to have to make. but the alternative, a pretty chaotic / colossal failure, on balance seemed worse.
     
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  8. Healthcare should be a basic right, not a business.
     
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  9. truly shocking!!! who would have guessed that our government would be such a colossal failure when it comes to investing our hard earned money!!
    very excited about Barak and Nancy being responsible for our healthcare.
     
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  10. I agree with Bengt.
     
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  11. For once the american people may wake up. The gov't. promised we would get it back, then they said maybe, then we may get some of it back. Anyone want to guess what the next statement will be? We've got to be crazy to buy a GM or Chrysler product. There's one thing the UAW, GM and Chrysler are saying about the American taxpayer. Suckers!
     
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  12. GM has stock?? I didn't think they were planning on going public until next year. Then again how can GM be a private company if everybody in the US owns 61% of it?
     
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  13. The challenge here is that to recoup the maximum amount of cash, the government may need to be a long-term investor ... which is directly contrary to the desires of (a) the folks who always opposed the bailout; and (b) many others who, although they reluctantly supported government intervention, do NOT want the US govt holding onto large stakes in major private corporations for more than the very minimum necessary.
    My bet is that they gradually do a selldown, depending on prospects. The more they sell, the better the chances for GM.
    THough if a few in Congress get any serious traction with the idea of passing legislation setting a must-sell-by date ... heaven help the US taxpayer, 'cause that'll be the worst of ALL possible circumstances. Ideally we won't know the govt has sold its shares until AFTER the fact.
     
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  14. No wonder GM lost interest in selling Opel. Who needs that pittance when Obama can just write another check. Has anyone wondered how many more billions have been sent GM's way that were not reported? The sooner they're out of business the better.
     
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  15. Just a note to everyone: these sums of money are so large, there is no way for us common people to even grasp how much money that is. Even a small fraction of that could make a man happy for the rest of his life...
     
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  16. The vast bulk of the money lent to the "banking industry" is sunk in three entities: Citigroup, bank of America and MOST importantly AIG. AIG is not a bank but was lumped-in with banks for TARP purposes to the tune of nearly $160 billion. The majority of banks have repaid with a healthy return. The loans to the auto makers are a black hole -- but none of us are surprised by that.
     
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