DETROIT – The U.S. government bailout of General Motors (GM) spared 1.2 million jobs in 2009 and preserved $39.4 billion in personal and social insurance tax collections in 2009 and 2010, according to a Center for Automotive Research (CAR) study released today.
“Any complete cost-benefit assessment of the federal assistance to GM in its restructuring must consider the total net returns to the public investment …,” CAR researchers Sean McAlinden and Debra Maranger Menk wrote in “The Effect on the U.S. Economy of the Successful Restructuring of General Motors.”
The infusion of money into GM and Chrysler by the administrations of Presidents George W. Bush and Barack Obama avoided loss to the U.S. of $105.3 billion in transfer payments and personal and social insurance tax collections, the study finds. Additionally, 2.6 million jobs were saved in 2009 alone and $284.4 billion in personal income was preserved over 2009-2010.
“If the U.S. government had refused to assist (GM and Chrysler)… in a financial crisis of unprecedented proportions, then the whole U.S. economy was operating without a safety net, with the exception, of course, of the banking system,” McAlinden and Maranger Menk concluded. The center independently funded the new study as a follow-up to a November 2008 analysis.
