Was the Big 3 Bailout Worth It?

The U.S. government bailout of the auto industry lasted from January 2009 to December 2013. The Big Three automakers approached Congress in November 2008. They warned that, without the bailout, General Motors Company and Chrysler LLC faced bankruptcy and the loss of one million jobs. The Ford Motor Company didn't need the funds since it had already cut costs. But it asked to be included so it wouldn't suffer by competing with subsidized companies. The Treasury Department invested $80.7 billion from the $700 billion authorized by Emergency Economic Stabilization Act. It recouped all but $10.2 billion. It both lent money and bought stock ownership in GM and Chrysler. It also provided incentives to spur new car purchases. In effect, the government nationalized GM and Chrysler just as it did Fannie Mae, Freddie Mac, and the American International Group. Here's the Troubled Asset Relief Program funds bailout breakdown. It shows what the government invested. It then shows what it sold the shares for, including what it received in its debt repayment. It then calculates the taxpayer’s profit or loss.

More From The Balance: