Columnists across the political spectrum agree that the auto bailouts were a lot more costly, and a lot less justified, than their supporters have been willing to admit.
In the Wall Street Journal, David Skeel points out that the auto bailouts were much more costly than is commonly assumed. The Obama Administration claims that taxpayers will ultimately lose only $14 billion from the bailouts of GM and Chrysler. But as Skeel notes, that “$14 billion figure omits the cost of the previously accumulated tax losses GM can apply against future profits, thanks to a special post-bailout government gift. The ordinary rule is that these losses can only be preserved after bankruptcy if the company is restructured—not if it’s sold. By waiving this rule, the government saved GM at least $12 billion to $13 billion in future taxes, a large chunk of which . . . came straight out of taxpayers’ pockets.”
