Great news! The U.S. will only lose $30 billion on the auto industry bailout

I have some great news for you today. Do you remember the $82 billion bailout of the auto industry? Well, the government was expecting to lose $44 billion, but revised figures show that the loss will only be $30 billion! Isn’t that awesome? Yeah, I don’t think so either.

Barack Obama and other socialist-leaning politicians thought the bailout was a great idea, and they still do. The best thing that could have happened would have been to let Chrysler file for bankruptcy, cancel all of their contracts, then reorganize without government assistance. More jobs would have been lost, unions would have been angry, and the companies would have been decimated, but I find that preferrable to the precedent that was set.

On the other hand, their loss would have been someone elses gain. Their assets could have been purchased by other companies, many of those employees would have been put back to work, and it would have been a great opportunity for smaller, independent car companies to expand. In the long run, it would have been a perfect market solution, and it would have rewarded the companies that made the best decisions.

Think about this: The government owns a substantial portion of the auto industry, they tell them what types of cars to make, and control who is in charge. This was all done under the guise of preserving “America’s auto industry,” but did it? Won’t Fiat, a foreign car company which purchased part of Chrysler, own a controlling share in the company? Chrysler will be as American as Toyota, Honda, Volkswagen, and Suzuki.

This leads to the problem of the government picking winners and losers. While GM and Chrysler are being propped up by the federal government at tax payer expense, we have Ford who is steadily improving their bottom-line and their fleet. What do they get for their trouble? They get the opportnity to compete against the federal government. Congratulations!

We were told the auto bailout was a necessity, but that’s far from the truth. The void left by Chrysler and General Motors would have been filled by other enterprising companies. As an American consumer and tax payer, I don’t think I could bring myself to buy a car produced by General Motors or Chrysler. If you feel the same about the bailout, I would encourage you to do the same. I hear Ford has some great new vehicles.