President Bush's announcement that a multi-billion-dollar government backed loan will be available for faltering General Motors and Chrysler was the topic on today's News Talk Online on Paltalk.com.
The president, who undoubtedly consulted with President-elect Barack Obama first, said that allowing the auto industry to collapse "is not a responsible course of action."
In this, he is right.
Many Americans, dubious over the bailout plan for Wall Street, are less-than-enthusiastic about the government lending two of the former Big Three automakers at least $13.4 billion. But emotional responses aside, to fail to act would, as the president's father might say, not be prudent.
The ripple effect on the already devastated economy if the auto industry should fail is nearly incomprehensible. Many of us lament the fact that we are hurting while the fat cats are getting government bailouts. Fair enough. But the hurt will become more pronounced if GM and Chrysler fall.
Even the stronger auto companies would suffer. Because they all share some suppliers. Take two auto giants suddenly out of the equation, then suppliers may close shop too. So this plan actually helps protect GM and Chrysler's competitors.
By the way, this is not a bailout. It is a loan. True, it may turn out to be a poor investment. The government may never recoup the money it lends. But then again, it may. The last such time the government stepped in with loans to back a car company was when it propped up Chrysler. And that turned out to be an excellent investment. The money was returned, with dividends.
A poorer investment would be no investment at all. The results of which would be an even weaker economy, more people laid off, more people on welfare rolls and in unemployment lines.
If nothing else, President Bush's actions today were the lesser of two evils.
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