Taxpayers lost a whopping $10.5 billion on the federal government bailout of General Motors – but officials insisted another course of action would have been even worse.
After selling its remaining shares of the Detroit-based automaker Monday, the US Department of the Treasury said it had recouped $39 billion of the $49.5 billion it spent to save the failing company at the height of the financial crisis five years ago.
If the government hadn’t come to the rescue, more than 1 million jobs would have disappeared, and the economy could have plunged even further – from a recession into a depression, US Treasury Secretary Jacob Lew said.
“The economic stakes were high, and President Obama understood that inaction was not an option,” Lew said. “His decision to commit additional support to GM while requiring them to fundamentally restructure their business was tough, but it was right.”
Lew said Obama’s decision to continue the bailout of GM – which was started under President George W. Bush in late 2008 – helped prevent a collapse of the entire auto industry.
The government began selling shares once GM went public again in November 2010, and the pace rose steadily this year as the stock rose more than 40%.
Last month, the government said it expected to sell the remaining 2% stake by the end of the year.
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