Charles Momsen wrote:
This article:

http://www.telegraph.co.uk/news/worl...m-economy.html

says US carmaker failure could cut 4% from the GDP. But the cost of a
bailout is no less than 6% of GDP!

No brainer!

Let them go bankrupt!


I believe this underestimates the effect. While the loss caused
directly by the personnel working for the big 3 maybe only 4%. There
are other losses that are not being considered. In an area like
Indianapolis there are many business that are dependent on the auto
industry. The prepared food industry will be hit hard as layoff will
directly effect them. There are similar industries that will be
effected that are several generation removed from the company
manufacturing cars.

The other cost is a general cost. When polosi caused the failure of the
first bailout bill the market lost about 30% in 15 days. The market has
not recovered. I have seen data indicating that if the auto industry is
not bailed out, the stock market will loose another 2000 points. As I
remember about the time of polosi's tantrum, 401k plans had lost nearly
4 trillion dollars. With the subsequent losses in the market it is many
times that in all of the companies that have been effected by the
democrats bad mortgages, and the lack of credit.