07.21.2011 0

Taxpayers Lose $1.3 Billion On Chrysler Bailout


What me and countless others predicted would happen years ago has finally happened–the U.S. government admits that it lost money on bailing out Chrysler:

U.S. taxpayers likely lost $1.3 billion in the government bailout of Chrysler, the Treasury Department announced Thursday.

The government recently sold its remaining 6% stake in the company to Italian automaker Fiat, wrapping up the 2009 auto bailouts that were part of TARP.

Fiat paid the Treasury a total of $560 million for the remaining shares, as well as rights to shares held by the United Auto Workers retiree trust.

Originally, the government committed a total of $12.5 billion to the struggling automaker, Old Chrysler, and the company’s newly formed Chrysler Group. Of those funds, $11.2 billion has been returned through principal repayments, interest and cancelled commitments, the Treasury said. The new Chrysler Group paid back $5.1 billion in loans in May.

Even though that means $1.3 billion will not be recovered from the bankrupt Old Chrysler, the Treasury called it a “major accomplishment.”

“With today’s closing, the US government has exited its investment in Chrysler at least six years earlier than expected,” Tim Massad, Treasury assistant secretary for financial stability said in a release.

The Treasury Department may have pulled out of Chrysler 6 years faster than they thought they would, but that is not a success when you factor in the massive losses.

When the government spends other peoples money, they have no incentive to be responsible with it.

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