Mitt Romney’s Stance on GM Sale Would Cost Taxpayers Dearly
It’s not very often that a presidential candidate promises to promptly write off $15 billion in taxpayer money if he’s elected. But that’s what Mitt Romney has done.
Romney told the Detroit News recently that as president, he’d quickly sell the U.S. government’s stake in General Motors, which is valued at about $10.6 billion, based on GM’s current stock price. But GM still owes the government about $26.4 billion, so selling at the current price would leave taxpayers out roughly $15.8 billion.
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The Obama administration would dearly love to end its involvement with GM as well, and reduce a glaring liability among voters opposed to the 2009 auto bailouts. That would suit GM just fine. But taxpayers taking a loss on the deal would be an ugly ending. Besides, the government can hold onto its shares as long as it likes, waiting to sell until it can get its money back in full. It can also do that as a passive investor with no involvement in the company’s day-to-day operations.