Auto Industry Hoping for Handout

The American auto industry has been hit hard by its own poor decision-making and by circumstances well beyond its control. They are now desperately seeking a government bailout package to fix both, according to CNN Money.

Lobbyists have been dispatched at both the Democratic and Republican National Conventions with the intent of securing up to $50 billion in loans. The Detroit giants are asking for money in order to refurbish their manufacturing facilities and turn to fuel-efficient vehicles.

The industry contends that such measures are necessary because of oil-market fluctuations which inverted consumer demand almost overnight. Americans no longer want gas-guzzling trucks and SUVs, which used to be cash-cows for automakers. Inexpensive, fuel-efficient cars have not been the focus of the American automotive industry in recent decades, and they are not properly equipped to produce them. U.S. carmakers have fallen exponentially during the last year and have hemorrhaged cash at astounding rates.

Both the Obama and McCain campaigns have championed the idea of a multi-billion dollar restructuring package. The Bush administration and Congress seem accepting of the idea as well. It would be an economic tragedy if the U.S. were to subsidize these industries with billions of dollars and hope for the best. General Motors, Ford and Chrysler ignored the signs that fuel-efficiency was a reasonable pursuit after the Oil Crisis of the 1970s and 1980s. Japanese manufacturers like Toyota and Honda built their reputation on affordability and fuel-economy. American industrial titans hoped that the markets would never shift and built in no flexibility.

If the United States government approves a bailout package without administering strict regulations as to how the industries will maximize their potential, it may not bring real results. Furthermore, with the United States already terrifically indebted, any government spending of this magnitude without some means of revenue (taxes, tariffs, etc.) merely passes the buck for fiscal responsibility on to future generations.

Source CNN Money:

Click Here For Solutions To America's Economic Problems:

Let the candidates know your take on this issue:

Economy In Crisis relies on financial support from its readers. Learn more.

Your endorsement is greatly appreciated. Click here for other ways to get involved.