Faced with a possibility of being unable to approve the $25 billion bailout plan for the big three auto-makers in the U.S., the United States Senate decided to punt.
U.S. automakers have had low sales, and have been producing products unable to compete with foreign competition. General Motors claims that without the bailout they will go into bankruptcy, and that will cause a tidal wave of economic troubles way beyond what we are currently experiencing.
The federal emergency loan plan, however, stalled in the Senate. The lawmakers in both parties are refusing to take the lead, fearful that the blame will land in their lap should the plan not work. Also, the more conservative Republicans are proclaiming it is a bad plan, just as the other bailout was, and want no part of sending this nation into a socialist direction more so than what it already has gone.
Senate Majority Leader Harry Reid, D-Nev., killed the plans for a vote, and has proclaimed it is up to Bush’s team to act, now.
Many lawmakers in both parties believe that bankruptcy of the automobile manufacturing companies might be a better option, and more appropriate, since they have done little to complete with foreign competition, and adjust their products and work forces for the 21st century.
The Big Three have argued that bankruptcy would devastate their companies.
The plan to bailout the auto industry, in my opinion, is typical liberalism. Punish the successful while providing rewards for failure. The American auto industry has failed, and has refused to do what it takes to compete (coupled with the stringent government regulations of the industry, high fees, and tax structure). If the Big Three fail, other companies, like Toyota or Honda, will pick up the slack, pick up many of the workers, and see the opportunity for growth in the absence of the American vehicles. Then, perhaps, a new American company will form – one that has learned the lessons of the failed industry before it.
Will their failure add to the already difficult economic situation in America? Yes. But how will it help the economy if failed businesses are given the capital to continue in their failing ways?