But who will buy.....??

The Detroit auto makers were before Congress today asking for about $25 billion in loans to tide them over for the next few months. Suppose they get those loans and manage to build more cars --- who is going to buy them in this economy? Fixing the car maker's immediate cash problems does nothing if Americans can't afford to buy their products. Perhaps Congress ought to give every American family $25,000 to be spent only on buying a new American car, so that there will be a market for all those cars they want to continue to build.

Seriously, though, I don't get the feeling that anyone in Washington has really thought this all through. Printing money and handing it around to big companies doesn't seem to me to do anything toward solving the underlying problems; it just serves as short-term life support. And the astronomical debt this approach is accumulating will certainly create some severe long-term problems for all of us.

I expect that what should happen is that these companies should go into Chapter 11 bankruptcy, get reorganized to offload some of their unsupportable debt and obligations, and clean out their incompetent management, and then perhaps re-emerge lean enough to compete successfully in the market again. That will be painful for shareholders and workers, but it will eliminate the inefficient producers and divert capital to more productive uses. This business of trying to keep inefficient producers in business just to save jobs is a dead-end street, as a good many other countries have already proven.