The United States’ bailout of General Motors saved about 1.2 million jobs and helped preserve $39.4 billion in personal and social insurance tax collections between 2009 and 2010, a new study finds.
Released by the Center for Automotive Research on Monday, the study found that the effects of the bailout were even more profound when Chrysler was included, with the government’s intervention saving 2.6 million jobs and $105.3 billion in transfer payments and personal and social insurance tax collections. The bailout also saved an estimated $284.4 billion in personal income.
“Any complete cost-benefit assessment of the federal assistance to GM in its restructuring must consider the total net returns to the public investment…” researchers Sean McAlinden and Debra Maranger Menk wrote in “The Effect on the U.S. Economy of the Successful Restructuring of General Motors.”
McAlinden and Menk added: “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.”
The Treasury Department expects to lose $9.7 billion on its $49.5 billion bailout of GM.