When the freaks on wall street RUINED the commercial credit market they in effect cut off credit to everyone. Homeowners, Investors, Small business', Large Business', and even STATES are all feeling the credit crunch. Without credit the economy grinds to a halt. Noone can buy anything unless they use cash, but at anytime the amount of cash in circulation is only about $1000 per man, woman, and child in America. Most of what the country lives off of is CREDIT. Moreover we DO NOT live in a "free market" society, sometimes its a "fair market", but its never been free. {BTW, I do mean NEVER. The first bill signed into law was a tarrif (tax) on imported goods.}

Now; with that being said, Federal, State and Local governments all use taxes to underwrite (finance) business'. The Low capital gains tax is just one example. Its to encourage investment, and reward entrepreneurship. To get large companies to move to their Country, state, and town governments provide all sorts of incentives. Alabama (Sen Shelby's state) gave Toyota (just Toyota) almost $60,000,000,000 (yup, 60 BILLION) in tax breaks for the last 3 years. BTW, This is a give away, not a loan.

 

The reason I use Toyota is 3 fold.

Point one is in order to bring union wages on par with Toyota's would mean UAW would get a raise of $2 an hour.

Point 2 is Toyota's stock price has dropped by 45% and it's US car sales are down by 35%.

Point 3 is Toyota is already HEAVILY subsidized (like all the foreign car companies) by their homeland. They don't pay for healthcare, and get a 27 Billion dollar grant EVERY year for research and development. Worst of all they get export credit from their government which actually provides most of their profit every quarter.

We cannot afford to loose the American Auto industry. Its 3 million jobs lost, the pensions of 2 million retirees, and the healthcare of almost 8 million people. It is the heart of our manufacturing base, and a national security priority.

Until the credit market opens up again, the federal government will need to do the loans. I realize economics wasn't most people's favorite subject, but this ain't rocket science.