Joe Biden's Unicorn Farm Economics
As the Obama campaign continues to tout the GM bailout as an industrial policy success, the Treasury Department continues to revise upward the staggering losses inflicted on U.S. taxpayers.
On the day Government Motors, aka GM, announced it was recalling at least 38,000 of its vehicles — Impalas used by police nationwide and in Canada — due to a crash risk, a new Treasury report said it now expects to lose $25 billion on the bailout, $3.3 billion more than forecast earlier.
As the Detroit News reported, this loss was based on GM's stock price at the time of the report, which was 15% higher than the previous report. Because the stock price has fallen since then, the latest report likely understates taxpayers' real losses.
The monthly report sent to Congress last Friday covers predicted losses through May 31, when GM's stock price was $22.20 a share.
On Tuesday, GM fell $0.26, or 1.3%, to $20.21.
At that price, the government would lose another $995 million on its GM bailout. The report notes the government still has 500 million shares of GM and needs to sell those shares at $53 each for the government to break even on the bailout.