Losses Now At $23.6 Billion

The Treasury Department dramatically boosted its estimate of losses from its $85 billion auto industry bailout by more than $9 billion in the face of General Motors Co.'s (Obama Motors) steep stock decline.  In its monthly report to Congress, the Treasury Department now says it expects to lose $23.6 billion, up from its previous estimate of $14.33 billion.

The Treasury now pegs the cost of the bailout of GM, Chrysler Group LLC and the auto finance companies at $79.6 billion. It no longer includes $5 billion it set aside to guarantee payments to auto suppliers in 2009.

The government has recovered $23.2 billion of its $49.5 billion GM bailout, and cut its stake in the company from 61 percent to 26.5 percent. But it has been forced to put on hold the sale of its remaining 500 million shares of stock.

The new estimate also hikes the overall cost of the $700 billion Troubled Asset Relief Program costs to taxpayers. TARP is the emergency program approved by Congress in late 2008 at the height of the financial crisis.

In total, the government used $425 billion to bailout banks, insurance companies and automakers, and provided $45 billion in housing program assistance.

The government now expects to lose $57.33 billion, including the full cost of the housing program, up from $36.7 billion. The new estimate means the government doesn't believe it will make an overall profit on its bailouts.

The new bailout forecast also represents an increase in the government's forecast in its losses from its $17.2 billion bailout of Detroit-based auto and mortgage lender Ally Financial Inc. The government holds a 74 percent stake in Ally, which has been forced to put its planned initial public offering on hold because of market conditions.

The share holders are the big losers.  Barack Obama decided to pay off the unions and left the people who had invested in GM on the outside looking in.

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