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Comment by notyourwork | Hacker News Reader

GM repaid all the debt given during the rescue, please don’t conflate a bail out with the companies poor decisions.

Not per Wikipedia[1]:"Through the Troubled Asset Relief Program the US Treasury invested a total $51 billion into the GM bankruptcy. Until December 10, 2013, the U. S. Treasury recovered $39 billion from selling its GM stake. The final direct cost to the Treasury of the GM bailout was $11-12 billion ($10.5 billion for General Motors and $1.5 billion for former GM financing GMAC, now known as Ally)."

1. https://en.wikipedia.org/wiki/General_Motors_Chapter_11_reor...

Did you miss the next sentence?

> A study by the Center for Automotive Research found that the GM bailout saved 1.2 million jobs and preserved $34.9 billion in tax revenue.

The whole point was to avoid the economic fallout of a GM collapse (and with it, yet another bank for the FDIC to deal with).

An automotive special interest group concluded that a $10.5B bailout for the automotive sector was a good thing!

I went and checked their funding, and only a quarter of it is from corporate interests. Governments actually fund them more.

As if those 1.2 million people would have just been twiddling their thumbs.

Why do you think it’s called “The Great Recession”?

Because a business cycle contraction occurred? If GM had been allowed to fail, other companies would have filled the gap in the market, and new businesses would have emerged, most likely generating even greater tax revenue over time. While there may have been some short-term thumb twiddling, the market would have eventually created new jobs elsewhere, jobs that would have been even more productive. There's a great opportunity cost to "saving" millions of unproductive jobs.

> Because a business cycle contraction occurred?

Yeah, like in 1929.

> If GM had been allowed to fail, other companies would have filled the gap

Which ones? A failure of GM would have hit Ford as well, because they share a lot of suppliers.

Not true at all; both the bondholders, who under the law were supposed to be senior, got screwed over, and certain non-union salaried employee pensions, were severely cut out of pension money by the PBGC.

If they had been making good decisions they would not have needed the bailout.

Nonsense. The government took a $10.5B loss when it converted the loan to equity. At one point the government owned 61% of GM. Wild.

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