A pair of Michigan consulting firms say an automaker bankruptcy would be four times more expensive to taxpayers than a government bailout that allows the companies to restructure.
If two of the Big Three declare bankruptcy and are forced to liquidate, federal and state taxpayers would lose $66 billion in the first two years alone, according to a study by Anderson Economic Group of East Lansing, Mich., and BBK, a business advisory firm in Southfield, Mich. That scenario -- which envisions the loss of 1.8 million jobs -- includes costs of $20 billion in lost federal income taxes, $21 billion in payroll taxes, $6 billion in state income and property taxes, and $5 billion in unemployment benefits.
A $30 billion loan in which half is repaid and the government gets a stake in the companies would cost $16 billion, with far less in lost revenue and higher spending to support unemployed workers, the firms predicted.
Warily eyeing the auto industry's problems is the Pension Benefit Guaranty Corp., the federal corporation that insures the defined-benefit pensions of 44 million American workers, including autoworkers.
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Fanny May and Freddie Mac and the Oil industry is the reason for our present circumstances. Why should be punish ourselves for the sorry politicians and greedy CEOs who could care less about the average hard working person. Their greed and miss management are the culprit not you or me or the big three. Our senators need to wake up and support the people not themselves.
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