I predicted this almost a year ago to-date, noting that even if they “repay” their loans, those of us who really financed it won’t get our money back. Uncle Sam will, but we won’t see a penny of it; no dividend checks, no profit sharing, nothing.
Well, it’s official. According to the Detroit News, the Obama administration concedes that the auto bailout money will not be repaid. The silver lining, according to the White House, is that “the projected loss came down to $30 billion from $44 billion” an improvement attributed to better-than-forecast auto sales.
My take is that most of the “improvement” in auto sales for FY2009 were simply time shifted from 2010 or 2011 due to the cash for clunkers debacle, which means that it’s not a real improvement, and in years to come we’ll end up paying for these short-term gains.