GM goes bankrupt- subsidize autos?

They should have let it die in the first place. If a business can't compete in the existing market, then let them go under. It's as simple as that.

Well, I think I brought this up before, but it wasn't really expected to survive.

The money did what it was supposed to do. Let's see if I remember my stuff. If we had let them go under at the beginning, it would have sent $80 billion to money heaven (if I remember correctly, also would have been devastating to already crippled investors and lenders). The idea was that we could pay about $20 billion upfront or let them fail and end up taking a $54 billion dollar hit through other links, lost revenue, etc.

As it is, they are reorganizing and getting back on their feet. Not the best way to handle it, but far from abject failure. Sort of a heads I win, tails you lose setup anyway. They could let it drag 2 or 3 million jobs down the drain and screw up a whole lot of other innocent stuff. Or they could jump in and try to be a lender of last resort while upping spending and taking some flak.
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As to the "subsidizing", that's basically just an environmental plan that he probably wanted to put into place. A number of states have these in place (came up in another discussion). Yeah...kinda annoying, but a cash rebate providing people with an incentive to get a greener car is standard government stuff. The fact that it could help the auto industry is just sorta icing on the cake (and my cynical side would point out that it's a way to get bailout money for an environmental pet project).

Delta said:

They should have let it die in the first place. If a business can't compete in the existing market, then let them go under. It's as simple as that.

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So why are the banks that should have failed last year still around? What is the difference?

If we would have let them die, then the credit market would have truly frozen and a bunch of other corporations would have been having to withhold payrolls, cancel orders, etc. due to a shortage of cash.

The fact that the Bond market is recovering shows that we probably did the right thing there.

The Parakeet said:

If we would have let them die, then the credit market would have truly frozen and a bunch of other corporations would have been having to withhold payrolls, cancel orders, etc. due to a shortage of cash.

The fact that the Bond market is recovering shows that we probably did the right thing there.

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I don't agree. It is a reflection of 1.2-trillion debt that has been approved in January. It has fuelled the next "binge".

Not so much.

The crisis had a whole bunch of issues.

The first was to unfreeze the credit market to keep everyone from going down in the wake of the banks.

Then we had to sort out the bad banks from the good.

Then put in regulation.

The money helped get more liquidity out there, but the bond market would be somewhat separate. I believe that a good bit of the recovery was a return of investment to the arena. When the market was freezing, everyone just sorta held their money. Keeping the banks from failing let the bond market recover a bit.

We're working on two and three still.

The Parakeet said:

Not so much.

The crisis had a whole bunch of issues.

The first was to unfreeze the credit market to keep everyone from going down in the wake of the banks.

Then we had to sort out the bad banks from the good.

Then put in regulation.

The money helped get more liquidity out there, but the bond market would be somewhat separate. I believe that a good bit of the recovery was a return of investment to the arena. When the market was freezing, everyone just sorta held their money. Keeping the banks from failing let the bond market recover a bit.

We're working on two and three still.

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I thought the bond market has to do with debt? This is how the 1.2-trillion is obtained? By selling Government bonds?