Auto bailout costs rise

The Detroit News reports:

The Treasury Department dramatically boosted its estimate of losses from its $85 billion auto industry bailout by more than $9 billion in the face of General Motors Co.’s steep stock decline. In its monthly report to Congress, the Treasury Department now says it expects to lose $23.6 billion, up from its previous estimate of $14.33 billion. . .

The big increase is a reflection of the sharp decline in the value of GM’s share price.

POSTSCRIPT: As a matter of terminology, though, it’s not really right to call it a bailout of the auto industry. The auto industry — and even GM itself — would have survived if GM and Chrysler had done into bankruptcy. The bailout wasn’t for the auto industry’s creditors either, most of whom took a bath in the government-imposed settlement. The bailout’s beneficiary was the unions, who survived virtually unscathed.

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