Report: GM & Chrysler Bailouts Saved Millions of Jobs
People will be arguing for years over whether the decision to bailout the auto industry when the financial markets nearly collapsed in 2009 was a good maneuver. Dedicated free-market purists argue that the Federal government should never have gotten involved in the first place, and left General Motors (NYSE:GM) and others to their own devices to sort out their own needs by themselves. Others argue that the financial burden of allowing that to happen would have been far costlier than the financial intervention, and that the Fed did what it needed to in order to ensure a degree of stability.
Now that the dust has cleared and the government has officially exited its stake in GM, a new report has surfaced that indicates that the injection of taxpayer dollars saved roughly 1.5 million jobs, between General Motors and the Chrysler Group. On a more financially relevant note, the report further estimates that the move preserved $105.3 billion in personal and social insurance tax collections, Reuters reports.
That’s a significantly higher number than was invested about four years ago, which totaled about $80 billion to “avoid the collapse of the industry that they felt would result in the loss of millions of U.S. jobs,” Reuters says. It would appear, then, that the government made the right decision in intervening in the economy’s best interest.