Rockindeano wrote:It is NOT a bailout. It is a LOAN.
And they are NOT right. GM says it can not make it through December. That means they go into Bankruptcy, which leads to liquidation. People do not and have never bought cars, from a company in bankruptcy.
Are the Auto makers guilty of remaining sterile and not adapting to change? Absolutely. However, a 30 billion loan is a far cry from a 700 billion dollar bailout.
And lest you think America is truly a capitalistic state, think again. The fact that the Administration sent out a tax rebate check to stimulate the economy is proof of that. Just call America Socialism Light, without the passionate programs that real Socialism economies cover.
Dean, that argument is 100% spot on for banks. Consumer confidence in banks is absolutely paramount in order for the banks to stay in business...as the assets of the bank are not actually controlled by the bank. The second people loose confidence in the bank, they'll take their money elsewhere. A bailout prevents that...although, another time and another discussion, we need to talk about whether the Economic Stablization Act of 2008 is actually doing as advertised...Regardless, the intent of bailing out banks is a just intent.
However, a bailout or a loan to the car industry is not sound. Consumer confidence isn't the issue here...you cant sit there with a straight face and say that people will start buying Suburbans, Explorers and Jeeps....just because the big three have been given enough taxpayer money to get them through to jan 31, 2009 (or more likely, just to year end). That doesn't fly.
Comsumer confidence isn't the issue. Poor product is the issue. If a company is making poor product that no one wants to buy....there's a reason for that. And to that same end...if no one wants to buy it as a consumer, they darn well dont want to fucking buy it as a taxpayer!
Now you are most certainly right in saying that people dont buy cars from a failing auto company....but the bailout is NOT going to change the underlying problems that put detroit in the dire circumstances it's in....and if you think, after the lobbyists are done with our so called representatives, that a bailout is going to ensure that those underlying problems are completely irradicated from the Big 3's business structure....I submit that the government would be better off spending 15-30 billion on a bridge in alaska...
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