January 28, 2012 by staff
$132.9 Billion, A government watchdog says U.S. taxpayers are still owed $132.9 billion that companies haven’t repaid from the financial bailout — General Motors and financial firms — and some of that will never be recovered.
The bailout, launched at the height of the financial crisis in September 2008, will continue to exist for years, says a report from Christy Romero, the acting special inspector general for the $700 billion bailout, according to wire reports in the Detroit Free Press.
Some bailout programs, such as the effort to help homeowners avoid foreclosure by reducing mortgage payments, will last as late as 2017, costing the government an additional $51 billion or so.
The gyrating stock market has slowed the Treasury Department’s efforts to sell off its stakes in 458 bailed-out companies, the report says:
They include insurer American International Group, GM and Ally Financial, the former GMAC, GM’s credit arm.
If Treasury plans to sell its stock in the three companies at or above the price where taxpayers would break even on their investment – $28.73 a share for AIG, $53.98 for GM – it may take a long time for the market to rebound to that level, the report says. AIG’s shares closed Wednesday at $25.31, while GM ended at $24.92. Ally isn’t publicly traded.
It will also be challenging for the government to get out of the 458 companies as the market remains volatile and banks struggle keep afloat in the tough economy, it says.
Congress authorized $700 billion for the bailout of financial companies and automakers, and $413.4 billion was paid out. So far the government has recovered about $318 billion. The bailout is called the Troubled Asset Relief Program, or TARP.
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