Oversight Committee Questions TARP Bailout of GMAC
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Remember the $17.2 billion bailout GMAC received? Today the TARP Oversight Committee has released a report stating that there might have been better options, such as a strategic bankruptcy, reports The New York Times. Moreover, the committee finds, GMAC was not too big to fail or "indeed of any systemic significance."
Interestingly, in typical wishy-washy Washington fashion, the panel fell short of taking a definitive position on whether the Treasury should have bailed out the auto lender giant:
The panel found that the Treasury treated GMAC with greater lenience than it did G.M. and Chrysler: it did not wipe out GMAC’s equity holders, require GMAC to plot a return to viability, or prod the company to use taxpayer money to increase consumer lending.
And the panel found that while the rescue of GMAC helped support the American auto industry, it also reinforced GMAC’s dominance over the revolving lines of credit used by auto dealers.
The Treasury stands by its decision, saying that the path they chose was "least costly and least disruptive."
Regardless of who is right, it looks like the government (and consequently taxpayers) may have to write off $6.3 billion of the bailout dollars as a loss, the Times reports. Of course, these days, that's practically pocket change.
(Photo credit: selbstfotografiert; C.C. 3.0)
