Skip to comments.Auto bailout saved 2.6m jobs,$105b in potential lost taxes(No joke,saying this w/ a straight face)
Posted on 12/09/2013 2:07:59 PM PST by bestintxas
Washingtons $49.5 billion bailout of General Motors saved at least 1.2 million jobs, protected hundreds of thousands of pensions and earned about $40 billion in tax collections, turning what some have dubbed a poor investment into a whopping bang for Uncle Sam, according to a new report.
The bottom line, according to the Center for Automotive Research study heralded by GM: When the full picture of what was at stake is considered, including the potential for millions to be put out of work, the government actually made out big time.
And when bailed-out Chrysler is included, the study found that bailouts to both automakers avoided loss to the U.S. of $105.3 billion in transfer payments and personal and social insurance tax collections. Additionally, 2.6 million jobs were saved in 2009 alone and $284.4 billion in personal income was preserved over 2009-2010.
The study, The Effect on the U.S. Economy of the Successful Restructuring of General Motors, addresses the estimates of how much taxpayers have yet to recover in cash from GM and Chrysler, a total of $13.7 billion.
But rather than just focus on that amount, the report points to how much in tax receipts and jobs would have been lost had the bailouts not been successful.
And when the math is done, the report suggests that the U.S. scored big by not losing big.
If the final net cost of this investment is $11.8 billion in unrecovered funds in GM and the reported loss of $1.9 billion in Chrysler, this net investment would total $13.7 billion in Treasury funds. Our results show the U.S. government saved or avoided the loss of $105.3 billion in transfer payments and the loss of personal and
(Excerpt) Read more at washingtonexaminer.com ...
So what was the billion that GM spent on the new plant in China, more US jobs?
Ford did it with no help...
Unfortunately, those jobs were in China, Mexico and India, as were the tax savings.
Of course, this assumes that GM and Chrysler would have shut down. Chrysler might have. GM would have reorganized and remained in existence. Typical socialist nonsense.
Well, first of all, they assume that none of the people who lost jobs would have found another job somewhere else. Where do they account for inefficiencies that were locked in because needed reforms to the union contracts were not made? Did they factor in the capital lost by the bondholders? The suppliers and dealers that got screwed? If you only count rainbow colored unicorns, but neglect to count the dead nags, any deal can look good.
It appears there is no such thing as “too big” a lie for this guy.
These folks employ so many more than the big three with their facilities in the industrial parks in the Western, Southern and Northern Burbs of Detroit...
Oh, something tells me that, no, they didn't.
This is just more Keynesian-aggregate crap isn't it. The loss of capital means nothing [the Fed can create more of that!]; the preservation of consumer spending is all that matters to them.
It's all they know.
Even more jobs would have been “saved” if the GM and Chrysler corporations had been allowed to proceed to bankruptcy, reorganized, and the various divisions spun off to Fiat, Volkswagen, Toyota and even Ford. The core corporations with their liabilities reduced to a manageable level, would have been able to revive as smaller, leaner entities, without all the legacy costs. They might have still been building automobiles, or gone into specialty production like construction equipment or railway rolling stock, but they would have been able to regain some control over corporate direction.
Even Studebaker did not close production altogether when it dissolved operations in South Bend, what was it, about 1966 or so. They moved major operations to Canada, and continued to build consumer products, as Studebaker-Worthington. And nobody, NOBODY, ever suggested that any form of government assistance be applied in that instance.
Well, the overall point is, if what they claim is true, then NO COMPANY should ever have to shutter its doors. The government should bail out EVERY failing company and we would be living in economic paradise. No jobs lost, no lost taxes, no social insurance liabilities. It was tried once. It was spelled “USSR”.
exactly. It is not going to work.
The ONLY way to project saving 2.6 million jobs is to first afirm the existance of the MULTIPLIER EFFECT...(usually mocked as “trickle down”).
The socialists in this administration can NOT insist the MULTIPLIER EFFECT only occurs when it’s backed by gov’t spending.
Primarily because gov’t spending is addition by subtraction.
First they have to steal the money from the producers, then they can inefficiently transfer a SMALL FRACTION to the entities that will make products that WEREN’T SUPPORTED IN THE MARKET PLACE TO BEGIN WITH!!!!!
You are correct, of course, but I have a slightly different take. Their ‘stimulus’ come with a so-called multiplier effect. Well if this is true, if every dollar spent in ‘stimulus’ produces, say $1.70 in economic activity, today, isn’t there a reverse multiplier effect when the money is TAKEN OUT of the economy to pay the debt that was incurred? And remember, it is not just a dollar taken out, it is a dollar taken out PLUS interest. Because remember, all this ‘stimulus’ happened with borrowed money.
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