Every GM Vehicle Sold Costs Taxpayers $12,200
According to a recent report by the National Taxpayers Union, American taxpayers have paid $12,200 for every General Motors vehicle sold through the beginning of 2011, and $7,600 for every Chrysler vehicle sold.
According to a recent report by the National Taxpayers Union, American taxpayers have paid $12,200 for every General Motors vehicle sold through the beginning of 2011, and $7,600 for every Chrysler vehicle sold.
“The Auto Bailout—A Taxpayer Quagmire,” a book written by Thomas Hopkins, professor of economics at Rochester Institute of Technology, analyzes what the government bailout of the auto industry has actually cost American taxpayers. This includes how much each taxpayer has contributed to the auto industry since December 2008 and how much each vehicle is costing the public. It also looks at the impact of the bailout on the domestic business environment and the overall economy.
“The bailout has created moral hazard problems, inadvertently handicapping the progress of stronger, non-subsidized producers,” Hopkins says. “The problems extend beyond just the auto industry, as favored status for one financial company and its bank necessarily complicates prospects for non-subsidized rivals. The time has come to stop such bailouts and, in an orderly way, to seek at least some recovery for taxpayers.”
“Every time someone in your neighborhood drives home in a shiny new Chevy Silverado, remember that it cost American taxpayers more than $12,000,” notes Pete Sepp, vice president for policy and communications for the National Taxpayers Union, a nonprofit citizens group founded in 1969. “Between this and GM’s plan to payback their bailout debt with other taxpayer funds, I wonder if all those Americans without work right now could think of any better ways to spend that money.”
The study found that the average American taxpaying family has invested roughly $800 in the auto bailouts so far. Moreover, government support for General Motors, Chrysler and GMAC—the financing subsidiary that supports sales at both—now stands at $78.9 billion with no clear plan for how the American public will ultimately be reimbursed.
“If Americans are to believe public officials’ claims that the government will eventually reprivatize the auto industry and recoup some of these funds, the necessity of a thoughtful exit plan is essential,” Hopkins adds. “However, at this time no such plan exists, making it unlikely that the Department of the Treasury or the public will ever recover its investment.”
The report is based on a November study released by the Government Accountability Office as well as statements and reports released from the U.S. Treasury.
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