The Big Three and the Big Bailout

It's no surprise to most people that the US economy is going through some trying times... The stock market has been a crazy roller coaster, seeing some of the largest 1-day rises and drops ever over the past few months. The mortgage crisis. Jobless claims are at something like a 26-year high. Businesses are closing. Gas prices had shot up over $4 earlier in the year, which was a HUGE blow to the Big Three automakers, GM, Chrysler, and Ford. Auto sales declined greatly, affecting much more than just the auto industry. The economy has gotten hit pretty much across the board, taking with it millions of older Americans' retirement dreams with it.

The Big Three automakers want a bailout. The leaders of each came to Washington to ask for a handout. Each flew in a private jet and that became a big sticking point. These companies wanted money, saying that they could not sustain themselves without a bailout. They said they were "too big to fail". The failure of any one would be devestating to an already ailing economy and the failure of all 3 would be far worse! Yet, while not able to survive, they all had the means to fly their private jets into Washington. GM told Congress they won't have they money to pay their bills by the end of the month, while Chrysler can survive until at least early next year. Ford is not as bad off.

So, a $14 billion bailout stalled in Congress. After the bank and mortgage bailout, can the government continue these? I am trying to save up the money for a plane ticket to Washington, where I will be requesting my own mortgage bailout. I am only going to be requesting $13 million, so a drop in the bucket like that should pass quickly.

The bailout has people split on what would be best. It is most definitely true that a failure of one, two, or all 3 Detroit automakers would be devestating, especially to what is already one of the poorest cities in the nation. The repercussions would be massive and would create another wave throughout the nation's economy. Joblessness is already at some of the highest levels seen in the past few decades. Could the economy even sustain such a blow at this time? It's tough to say...

On the opposite side of the coin is not bailing out Detroit. Can we really give more public funds to private corporations with little in return, but the promise of spending it? This isn't the first bailout for Detroit's automakers. Is it the last? Shouldn't we have very strict requirements that go with the money, instead of just handing it over? The automakers have not shown that they are even in touch with the people and what people want in a car. Foreign automakers, such as Honda, Toyota, and Volkswagen, have developed much smaller and more efficient cars, while Detroit has been plugging along at the same pattern. Shouldn't we require that they develop more efficient cars and greener technologies? If they are just going to take the money and use it to continue to stay the course, how many more bailouts are the American people going to be asked to shoulder before enough is enough?

It's a tough issue to muddle through and it's tough to know what the right move is going to be. I'm torn in both directions. I think a bailout would be a positive in that it will save millions of jobs and not allow another collapse to our economy. I also think that perhaps we should let them fail. They're going to fail. It's just a matter of when. How long must we postpone this debacle, when foreign automakers could come in and pick up the pieces of a shattered domestic auto industry and create jobs that are geared towards the future?