Auto Bailout
Published: November 3, 2009
(AP) - Government investigators say U.S. taxpayers are unlikely to recover their full investment in General Motors or Chrysler. The Government Accountability Office report involves $80 billion spent to save the two automakers.
The GAO concludes that General Motors and Chrysler Group likely will not be valuable enough for the Treasury Department to break even on its investment in the two auto companies that went though bankruptcy earlier this year.
The GAO also reveals that the Obama administration is closely scrutinizing the finances of GM and Chrysler and has set some requirements on production even though it has said it will maintain a hands-off approach on the automakers’ daily operations.
To recover the loans Treasury gave Chrysler and GM to keep them afloat, the automakers would have to reach valuations they did not approach even when they were healthier.
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Throughout economic inflation, government are denounce at most. Should there be government intervention in times of recession? A lot of people during this financial crisis have had their debt load greatly affected, and not just the super wealthy. However, if there were to be free government intervention in the form of debt alleviation to the citizens, it would flow straight back to the top, which won’t reinvest it, or create new industries, and will instead pocket it. It’s been suggested that government debt aid should be as minimal and cost effective as possible – if the TARP program had been spent on the people, rather than banks, each working taxpayer would have gotten almost $10,000. The debate over government intervention for debt relief is too complex to settle easily.
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