GM And Other Possible Failures

If GM were to go bankrupt (forbid) there is a lot at stake. Not only will the private sector lose, but I think medium to big banks may have a problem.

I think GM has 30 billion dollars in loans with these banks, and this obviously would cause more banking problems.

That 30 billion dollars could be used as part of the $48 billion the U.S. Government could loan GM (as mentioned in a previous article).

The ramifications of GM's pains is obvious to other sectors of the economy.

Saving GM

The U.S. Government should loan GM 48 billion dollars! Since their inception, the Japanese and South Korean governments have protected their industries and particularly their car industry. It is now time for the U.S. gov't to help out our car industry.

This loan by the U.S. gov't should be supplemented with another assist mentioned in a previous article. (That is if someone purchases a vehicle from GM, Ford or Chrysler, they should receive a 20% rebate of that vehicle's MSRP from the U.S. gov't).

Japanese and South Korean Governments have put up barriers to imported automobiles. This not only helped their auto industry to flourish, but the U.S. allowed practically all the cars they could manufacture into this country. A modest tariff of 5% should be put on all Japanese and South Korean automobiles, including their autos made here in the U.S.

It is imperative that these steps be taken to aid these U.S. companies, otherwise there may be little left. And the thought of an upstart auto company is unrealistic. Car manufacturing is far too complicated and is done on a massive scale. It would take far more money than suggested above to start an automobile company from scratch.

Revitalizing GM

The U.S. Government has to do something about GM and Chrysler. For these two industries to go down, would be a mockery of our capitalist system. I propose that the U.S. Government offer 20% rebates on the MSRP of a purchase of any vehicle from GM, Ford, and Chrysler. In other words, if a consumer buys a GM vehicle with an MSRP of $20,000.00 they would receive a $4,000.00 check from the U.S. Government.

I think this could save the companies aforementioned from collapsing during this treacherous recession. The stakes are too high. This is not favoritism. It is survival.

The Japanese and South Korean governments practically do not allow imported vehicles into their country. This is not globalism. The U.S. is by far the most global Democratic country in the world. We take every other countries goods and there is not reciprocation on their part.

Finally, Toyota had a bad year too. I think the Bank of Japan is loaning them a billion dollars. Just what we should do, in a more creative way to stimulate GM, Ford, and Chrysler sales.