The government bailed out the financial industry because banks and insurers are too intricately involved with each other and the public at large to fail. If AIG goes down, so goes much more. This is not the case with the auto industry, or so the government reasons.
The auto industry on the other hand, disagrees. They’ve got a message for the government and the public at large: Give us money or you’ll all be unemployed. And then there will be no money for the government.
CNNMoney: If the Big Three carmakers were to cut U.S. operations by 50%, 2.5 million jobs could be lost in 2009, according to a study released Wednesday.
The centre for Automotive Research (CAR), reported that the total employment impact includes nearly 250,000 jobs lost at the automakers and nearly 800,000 at auto industry suppliers.
In addition, CAR projects that there would be over 1.4 million additional job losses outside the industry, such as those lost from store closings in the community hit by a plant closing.
In economic terms, cutting operations in half would reduce personal income by over $125.1 billion in the first year, and $275.7 billion over three years, CAR said. And the impact of this personal income loss would cost the government $49.9 billion in 2009, and over $108.1 billion in total tax losses over three years.
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