Taxpayers To Lose Only $14 Billion on GM Bailout?

To begin with, that's a lot of money.  And I don't believe that number.  I think before we consider some of my points below, to take that number based on Geithner's calculations and proclamations would be more than just pure faith-based naivete, it would be ignorance.  That number, before looking at my add-ons below, is no doubt a lot higher than $14 billion (unless of course you put faith in Government-reported numbers).

Here's the news LINK  NOT included, I'm sure, in this estimate is the amount of money that was spent to subsidize the financing of autos produced by GM that have flooded the floor of the GM dealer network PLUS the money spent to subsidize the purchase and leasing of these vehicles by the consumer.  As an example, and this is well-known to those who observe the news and the facts, the cost of leasing a GM vehicle has been completely subsidized by the U.S. Government.  This is accomplished by the Government guaranteeing the "residual value" component of all GM auto leases, enabling the finance company, Ally aka GMAC, to create a lease with an unrealistically high residual value - the value at the end of the lease term, which thereby allows the lessor, GMAC, to create a lease with lower monthly payments and a much lower implied interest rate. But then what happens at the end of the lease when the market value of the used car is substantially lower than the residual value guaranteed by the lease?  The Government, aka the Taxpayer, ponies up the difference. We won't know what the final tab is to the Taxpayer on this subsidy clusterfu$k until the leases start expiring, but it will run into the billions.  That's just one example.  There's also the implicit guarantee of workforce entitlement and benefit plans.  Again, billions not included in the $14 billion.  It's insane.

Let me just say though, that while some may look at whatever the real amount of lost taxpayer money is as part of a crucial effort to rebuild America's auto industry, the fact of the matter is that IF the Government withdraws its life-support effort, GM will inevitably fail anyway.  America's labor and production costs - not to mention the fact that the product sucks compared to the competition, especially the better-priced, better-built Korean models - are not even closely in-line with that of the rest of the world.  This is just another one of those situations in which the Government will have wasted billions in resources and actually made things worse.  The proper resolution to this situation would have been to endure the short term agony from having GM and Chrysler die and let private entrepreneurs figure out how to make an automobile product that is both profitable for the shareholders AND doesn't burn up taxpayer wealth.  All we got with the GM/Chrysler bailout is the ephemeral extension of a dead business and the massive transfer of middle class wealth to the workers and upper management of GM and Chrysler.  Once again - just like with Wall Street - the CEO and other senior officers  at GM/Chrysler will make millions which are paid with Taxpayer money and the market will fail anyway.