Quality Weenie

Why The Bailout Loans Are A Must

Congress is debating whether or not to give the Big 3 a bailout loans, this should give them a good reason why.

According to a Bloomberg.com article by Alex Ortolani and Mike Ramsey, “A GM collapse alone would cost the government as much as $200 billion for costs associated with unemployment insurance and other programs after millions of auto-related job losses, according to a forecast from IHS Global Insight Inc. in Lexington, Massachusetts.” That’s not counting the cost should Ford and Chrysler suffer a similar fate.

If that isn't good enough reason how about this:

US carmakers have 105 plants in 20 states. They support 14,000 dealers across the country, who in turn employ 740,000 people. The automakers buy $156 billion in parts and services from suppliers in every state. The collapse of the Detroit automakers would lead to widespread failure of these suppliers, who also supply the non-US auto manufacturers. It would quickly put an estimated 3 million people out of jobs and cost this country $150 billion in spendable income and $45 billion in taxes those unemployed people won’t be paying.

You want to see a great depression, let the domestic automakers fail.

And let me reiterate that these are loans, not bailout money like the banks got.

Posted by Quality Weenie at November 18, 2008 09:58 AM | TrackBack