The Heritage Foundation has reported that the U.S. government will lose about $23 billion on the 2008-2009 bailout of General Motors and Chrysler. President Obama emphatically defends his decision to subsidize the automakers, arguing it was necessary to prevent massive job losses. But, even accepting this premise, the government could have executed the bailout with no net cost to taxpayers. It could have—had the Administration required the United Auto Workers (UAW) to accept standard bankruptcy concessions instead of granting the union preferential treatment. The extra UAW subsidies cost $26.5 billion—more than the entire foreign aid budget in 2011. The Administration did not need to lose money to keep GM and Chrysler operating. The Detroit auto bailout was, in fact, a UAW bailout. Get “The REALLY, Real, Deal with Brother Craig the Hatchet Man” and Heritage Foundation’s, James Sherk, Senior Policy Analyst in Labor Economics and co-author of the special white paper, “Auto Bailout or UAW Bailout? Taxpayer Losses Came from subsidizing Union Compensation, as he sorts out the bailout debacle and what it all means down the road. (This paper, in its entirety, can be found at http://report.heritage.org/bg2700).
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