The auto bailout has been debated time and time again, on whether it was worth American taxpayers’ money, despite saving a million jobs. A recent poll found that the majority of Americans still opposed the auto bailout, and a recent report that the cost has now been increased to $25 billion doesn’t help its cause.
The 2008-2009 automotive bailout has had its cost increased by 15-percent since an earlier forecast, mostly due in large part to a significant downturn in General Motors‘ stock price. The White House has recently raised the amount it doesn’t expect to recover to $25.1 billion – which is significantly less than the $44 billion the Obama Administration once predicted, but still more than the previous quarterly estimate of $21.7 billion.
Currently GM’s stock price hovers around $20 a share, but the government would need it to hit $53 to break even. Of course, that won’t be happening anytime soon considering it continues to drop since May.
Undoubtedly with the reelection coming up, the bailout will continue to be part of the debate, especially since current President Obama has adamantly defended the bailout.
[Source: The Detroit Bureau]