American taxpayers are expected to lose USD 27 billion from the 2008 financial bailout.
American taxpayers are expected to lose USD 27 billion from the 2008 financial bailout, as a report reveals further losses attributed to the US Treasury Department.
US taxpayers can expect to lose even more than the estimated USD 22 billion made in the fall last year, due to increased losses for the Treasury Department on sales of shares in bailed-out companies, according to a report released on Wednesday by the special inspector general for the Troubled Asset Relief Program (TARP).
The report said taxpayers could lose USD 5.5 billion specifically on Ally Financial - formerly called GMAC under a partnership with General Motors - in losses based on unsafe mortgages given right before the financial crisis. Ally owes USD 14.6 billion of the USD 17.2 billion in assistance it received.
The US government would also need to sell all General Motors shares it holds at USD 71.86 per share, more than double the current price of USD 28. GM still owes USD 21.6 billion of the USD 49.5 billion bailout it received.
"Taxpayers saved GMAC, and they should not be put in the position of needing to save the company again," said Special Inspector General Christy Romero, adding that both Ally and General Motors owe more than half of the USD 67.3 billion still owed to taxpayers by companies that were bailed out during the financial crisis.
The government watchdog went on to reveal fraud related to TARP during investigations that subsequently led to criminal charges against 119 people, including 82 senior company executives.
This comes as Romero accused the Treasury Department for providing “excessive” pay for executives tied to the bailed-out corporations rescued from the financial crisis including General Motors, Ally Financial and AIG - the largest bailout recipient at USD 182 billion.
After the 2008 financial crisis, Congress authorized USD 700 billion for the bailout of some of America’s largest companies. About USD 413 billion was eventually issued.