Larry Summers: Romney's Auto Rescue Claims Don't Add Up:

http://2012.talkingpointsmemo.com/2012/10/romneys-auto-bailout-stance-still-doesnt-add-up.php

Mitt Romney insisted in Monday’s debate that the auto companies would not have been liquidated under his watch, even as he’s complained the bilions of dollars in government aid used to rescue the industry was unnecessary.

But Larry Summers, who served as a top economic aide to President Obama in his first year, told TPM his claim is a “fantasy” for a variety of reasons.

Romney has said he would have saved money by relying on private finance to move the big three car companies through bankruptcy, although he’s been extremely vague as to how he would have reached that outcome without committing the vast federal resources that the Bush and Obama administrations did to achieve it. Romney claims that the two presidents overspent by billions of dollars by doling out federal loans when mere guarantees of some sort paired with an earlier bankruptcy might have gotten the job done for cheaper.

But Summers, echoing the opinion of industry experts, CEOs, and Republican politicians in Michigan who supported the bailout, said the kind of resources necessary were impossible to find in the private sector under any circumstances. The Detroit News editorial board made the same case this week even as it endorsed Romney.

“There was not private money available,” Summers told TPM on a conference call with reporters Friday. “And there wasn’t Congressional authority for the federal government to start guaranteeing loans ot the automobile companies.”

At the time, the top financial firms around the world were facing their own existential crisis, having just received hundreds of billions of dollars in government aid during the economic crash.
The auto rescue ended up requiring about $80 billion in aid from across the Bush and Obama administrations. That would have been by far the biggest debtor-in-possession bankruptcy loan in history had the private sector stepped in per Romney’s plan. The previous record? $8 billion to Lyondell Chemical in early 2009 — and it came with huge interest rates and fees. ...."