The Obama administration expects not to recover about one-third of the more than $80 billion the federal government invested in saving Chrysler and General Motors from going through a liquidation bankruptcy. The Detroit News reports:

Gene Sperling, senior counsel to Treasury Secretary Timothy Geithner, confirmed in an interview late today that the administration’s forecast is that it will lose $30 billion on its auto investments — but that’s down from an earlier estimate of $44 billion.

“The real news is the projected loss came down to $30 billion from $44 billion,” Sperling said, noting that auto sales have improved ahead of what many analysts had forecast. The administration still holds out hope that if things improve, the administration could still recover more.

As expensive as it sounds, this is still a bargain. If those two companies had collapsed, Ford would likely have gone with them after most of the major suppliers had gone bankrupt. The job loss would have likely been more than 3 million jobs, with all of the attendant costs at all levels of government for the increased social services needed for those people — not to mention the massive increase in foreclosures and the further damage that would have done to the banking industry and to property values.

On top of that, the Federal Benefit Guaranty Corporation would have been required by law to take over the pensions for more than a million retirees at a cost of tens of billions of dollars. The cost of saving GM and Chrysler was high; the cost of letting them fail would have been far higher.