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Forget the spin. Taxpayers still on the hook for auto bailouts
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| Contributor | Jason |
| Last Edited | Jason May 28, 2011 07:13pm |
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| Category | Opinion |
| News Date | Friday, May 27, 2011 02:05:00 AM UTC0:0 |
| Description | President Obama and two of his biggest union allies -- the United Auto Workers and the United Steelworkers -- plan to make the automotive bailout "a central issue" in the 2012 election, Politico reports. Republicans should view this as an opportunity. No issue better illustrates the deception, cronyism, disregard for the rule of law, and bad economic decisions of this White House than the auto bailouts.
On Tuesday, Obama announced that Chrysler had paid back all "outstanding loans to the U.S. Treasury and American taxpayers." This is highly misleading. American taxpayers still own a 6.6 percent stake in Chrysler, which cost them nearly $2 billion. Chrysler would have to be worth six times its current value ($5 billion) for the government to break even.
Obama's statement also conveniently forgets the $1.9 billion loan that was erased when Chrysler declared bankruptcy in 2009, and the additional $1.5 billion loaned to Chrysler's suppliers. And don't forget that the only way Chrysler could secure the money to pay off the Treasury loan was by getting Obama Energy Secretary Steven Chu to promise the company an additional $3.5 billion for energy-efficient vehicles. In reality, Chrysler is simply in the process of substituting one government loan for another. |
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