It cost taxpayers almost $10 billion to rescue General Motors. And another $2 billion to rescue Chrysler:
According to a report today from the Office of the Special Inspector General for the Troubled Asset Relief Program, “In return for a total of $49.5 billion in loans to GM, Treasury received $6.7 billion in debt in GM (which was subsequently repaid), in addition to $2.1 billion in preferred stock and a 61% common equity stake.” Treasury has divested its preferred stock and most of its common stock. “Because the common stock sales have all taken place below Treasury’s break-even price,” the report says, “Treasury has so far booked a loss of $9.7 billion on the sales.”
My criticism isn’t so much that they were bailed out, but that taxpayers lost so much money on the deal. Why didn’t the US Government get more equity? GM’s market cap today is $51 billion.