On Fri, 5 Dec 2008 00:01:02 -0500, "Ed Huntress"
wrote:
snip
The remaining manufacturers will pick up the slack.
They will all be hiring.

Are you sure? A sell off of the Big Three would result in so much
displacement that car sales for the whole country are likely to tank, IMO.
The multiplier effect throughout the economy will cause many more to be laid
off or fired. And then there will be no reason to hire most of the fired
workers, because nobody's buying.

Welcome to the new equilibrium. Would you like to buy one of my apples?
snip
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The problem is that no one knows, even if we turn the taxpayer
money tap full on, if "Detroit" *CAN* survive as a commercially
viable operation.

Of course with enough taxpayer subsidy per car, say 20 or 30
thousand $US per vehicle, Detroit can "survive," but then the
question becomes "can the US economy survive?"

We would do well to remember that the US taxpayers are *ALREADY*
supplying considerable subsidies for Detroit by picking up their
retiree medical costs through Medicare, and at the state level,
very considerable tax abatements on real estate, buildings,
machinery, inventory, etc. and even direct funding through
Economic Development Grants, OJ training, etc.

The automotive transplants, because they are making a profit, are
paying a reasonable share of the cost of running the government
at various levels through their *INCOME* taxes, while "Detroit,"
because they are producing cars at a loss, are not paying any
income tax, and indeed are generating large carry forward tax
losses which will offset future income tax payments (assuming
they ever earn any income).

Given that any business operated at a loss is a drain on the
macro/aggregate economy, just how long should major, for-profit
corporation be allowed to operate at a loss before they are
forced into chapter 11 or even chapter 7? The only thing that GM
appears to have accomplished over the last 10 years is to dig the
hole deeper, deeper, deeper, deeper… which the US taxpayers are
now being asked to back-fill with 100$ bills.


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).