December 10, 2008

I Can Hold It In No Longer - Bankruptcy Not Cheaper Then Loan

People keeping spouting off to just let the Domestics fail, that it would be cheaper then giving them a bailout Loan.

Lets look at that myth shall we?

Loans - $34 Billion

And lets define loans shall we, it's lending money to someone and they pay back it back. Unlike the bailout that was thrown at the banks that will never get paid back because they don't have to.

But I digress ...

“The report shows the immediate impact of the collapse of even two automotive manufacturers … would only further exacerbate our current economic crisis and likely would precipitate a complete shutdown of nearly all auto production in the U.S. for some time,”

The groups said 1.8 million jobs would be lost if two of Detroit’s three automakers fail under bankruptcy.

That is just if two fail.

Now your saying how could the entire automotive (domestic and foreign) shut down.


Supplier of the two failed companies would shut down, those same suppliers supply Ford, Toyota, Nissan, Honda, etc.

If Suppliers are not shipping parts to the ones still around they would not beable to produce cars.

Not to mention the side effects of putting 1.8 million people out of work. Those 1.8 million unemployed workers would be pulling unemployment insurance, they would also cut spending immediately.

So they would stop going to dentists, hair salons, chiropractors, stop buying appliances, new cars, doctors, etc.

So then your putting out of work a lot of those people mentioned above.

Trickle up effect, hence throwing the US and eventually the world into a depression similar to the 1930's.

Are you ready for that?

Posted by Quality Weenie at December 10, 2008 10:21 AM | TrackBack