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Letter: Obama’s shrewd deal

On Dec. 12 USA Today reported that the federal government sold the last shares that it held from the General Motors bailout that saved 1.2 million jobs but left the taxpayer with a $10.5 billion loss. Many criticized this as another failure of President Obama – but was it?

Besides allowing 1.2 million people to maintain their dignity and sense of self-worth, the American taxpayer actually profited from this deal.

Each saved job cost us $8,750.

If each job paid an average annual wage, with overtime, of $50,000 and the employee pays a 15 percent actual tax rate, that’s $7,500 in federal income tax revenue, leaving a “loss” of $1,250.

If you account for the avoided costs of unemployment compensation of, say, $300 per week, this “loss” is recovered in a little more than four weeks.

This doesn’t even account for avoided costs like food stamps and other welfare benefits and other positives such as state and local employee tax payments and the multiplier effect of those employees’ spending in the Michigan economy.

All in all, I’d say that Obama put together a pretty shrewd deal that benefitted everyone.



Legacy Comments13

Smoke and mirrors and a very shallow view. Government needs to stay out of the business world and private sector period!

There is a lot more to the GM deal that is not discussed often. Nobody mentions how GM paid back some of the loan with an escrow account of taxpayer money, nobody mentions the stock the Govt bought, nobody mentions how many folks who owned GM stock got screwed, nobody mentions how many workers got laid off, and a host of other things. In order to have an honest discussion of the GM deal, one needs to discuss all of it to get the picture of what that deal was. The lefties have no desire for details, cost etc. They are all about painting a rosy picture.

Actually the GM bailout was part of the TARP money which passed through congress under the bush administration before Obama became president. He simply signed the law. the letter writer should be examining the Wall Street distribution portion of the TARP money Obama had control over, that's where the tax payers got screwed, he was shrewd in that regard.

I was wrong , bush signed TARF into law in October 2008 before the presidential election in November 2008. $74.9 billion for Automakers. Obama had nothing to do with it.

you are very factually wrong as the GM bankruptcy orchestrated by Obama took place in June of 2009........ in addition go look at the original TARP legislation and show us where it is allowed to be used for a car company

GM's shrewd deal - GM does not pay taxes for 10 years

Well, in this case, progressives are willing to look the other way.

Real facts will always destroy the lefts narrative. For instance, do the readers know that as part of the nationalizing of GM it doesn't have to pay any income taxes for 10 years. There is so much more hokum to this story that the readers need to research before you believe the Obama worshippers.

I have 2 questions for you, Sail: 1. Did you put your right or left foot in your mouth? 2. How does it taste?

I don't think that is very valid nor is it really discourse. It does, however, illustrate what progressives do. When they don't have a valid argument, attack the poster.

Sail, now that James has corrected himself and said that this was actually passed under Bush and signed by Bush, would you like to change your opinion of the deal?

TARP was passed in the last days of Bush. I will accept your apology on who forced that debacle of a deal on the Americans. chew on this FACT: "President Barack Obama ushered General Motors Corp. into bankruptcy protection Monday and put the government behind the wheel of the company that once symbolized the nation's economic muscle" . Just last month the US closed out its position at a $$$$10 BILLION LOSS to the American Taxpayers .....there is a reason why you and gdn1 are what is known as a Low information democrat voter.

I suggest you research TARP and the GM bankruptcy in June of 2009 and get back to us

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