Big 3 Bailout: Why America Needs It

Maybe a more appropriate question is why America and the world need it? By now, it is blatantly evident that our country's economy is a major catalyst in this dire economic crisis. How do we soften the impact of such a colossal problem? We keep citizens employed.

If GM, Ford, and Chrysler go down the tube, so do millions of jobs. Consumer confidence is already in the toilet and businesses cannot sustain healthy profits by keeping their current employment levels. Now, the question is, why do so many people want to see this bailout fail?

Many are stuck to their rigid ideals of capitalism. Although a government bail-out does threaten the textbook definition of capitalism, can America afford to see the auto industry's behemoths fade away? Maybe it is time to reconsider our definition of capitalism. Or maybe it is time to realize that no one system is perfect.

Not only does the Big 3 directly employ a great number of workers, but they also employ workers on a much greater, indirect scale through their supporting industries. Let me spell this one out. Vehicles need glass, metals, upholstery, auto parts, rubber, and radios. The Big 3 does not manufacture these parts on their own. They purchase them through other companies. Other supporting industries are intimately involved in the auto industry crisis.

What does that mean in terms of our economy? If the GM, Ford, and Chrysler are allowed to file bankruptcy because of subpar management and lack of government intervention, a horrifying number of people will be unemployed. Unemployment means less spending. What does our economy need to lessen the impact of this crisis? We need citizen to have money in their pockets to spend. Less spending equals shrinking economy, which in turn equals recession. Although it is now being widely accepted that we are in a recession, there is no need for our government to allow this to be more painful than it has to be. Our economy is not going to recover favorably if the nation's spending power is dramatically cut through a sharp rise in unemployment in the auto industry.

What about the families going into foreclosure? Don't you think enough tax dollars are going to companies with incompetent executives? Indeed, this is testament to how our economic system has its flaws and it is a shame that our economy has to see days like these. However, the bigger question is how many more families will go into foreclosure if these massive auto industry layoffs do occur? Not only will we have a much larger number of people not able to pay their debt, but our current $700 billion bailout plan certainly will not be effective with these large scale layoffs.

With that being said, Congress made a good call on demanding a plan with "accountability and viability." It is a relief that at least Congress is appearing to make an effort to ensure that tax dollars will be spent wisely and not squandered by incompetent management. A change of management would make the deal much more appealing, along with selling the corporate jets and BMWs. We cannot afford to not bail out the Big 3, however, unaccountable spending of tax dollars will be just as devastating as bankruptcy.