Broke what law? How much would we have lost paying their employees unemployment and welfare benefits for 4 years? If you "got it" you'd see what really happened.
Delaying the inevitable?
What if Taxpayers Hadn't Bailed Out GM and Chrysler?
What if Taxpayers Hadn't Bailed Out GM and Chrysler?
Washington’s bailout provided Michigan and Detroit with a huge short-term window to restructure finances and spark an economic revival. But major challenges loom on the horizon.
Apologists for the bailout assert that were it not for the federal government’s emergency intervention, America would have lost one of its premier industries, along with a critical mass of skilled labor, physical plants, technology, and suppliers. Michigan, by default — with 20 percent of its $340 billion economy tied directly and indirectly to automotive-related manufacturing, along with sales and service activities — would have experienced a $60 billion to $70 billion annual economic hit for several years.
Critics of the bailout, on the other hand, point to Ford Motor Co. — which reported a record $20.3 billion in profits for 2011 — as proof positive why direct government intervention was not needed as a turnaround agent. After all, Ford rejected taxpayer funding and, rather than going bankrupt, adapted swiftly and durably to reality, thereby overcoming an existential economic threat.
The similarities between the recent bankruptcy proceedings and the lead-up to the 2025 fuel economy regulations are telling. Another crisis is possible...
The long-term view remains unclear. For all the hope surrounding Detroit’s renewed prospects, that other storm — more stringent CAFE standards in 2025 — is closing in on Detroit’s Big Three and their rivals. The Obama administration’s more lethal strain of Corporate Average Fuel Economy standards and regulations means that we may be doomed to repeat history.
Detroit and Michigan have historically epitomized the virtues of Yankee ingenuity, solving the most formidable technical and financial challenges of the marketplace. We should place greater confidence in our private sector’s initiatives and flexibility, while contracting economic burdens imposed on them by inexperienced regulators and politicians."