Why bail out detroit

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Mitchell Hartman Nov 13, Share Now on:. From left, G. Richard Wagoner Jr. Share Now:. Stories You Might Like How auto industry towns are faring a decade after the bailout. The Trump administration considers ways to help the travel industry. Why American auto companies no longer want to sell actual cars. Farm country wants to get back to business. Also Included in. Share this Story. Latest Episodes From Our Shows.

Read More. How auto industry towns are fairing a decade after the bailout. But Congress has already added a dangerous amount of debt to combat the virus. Most states are feeling the blow to their bottom line. Yet the federal government cannot magically wave a wand and make that money appear — as our country racks up record levels of borrowing, we are all going to have to pay for it.

Just in the last few weeks, Michigan politicians and interest groups have called on Congress to help boost infrastructure and K funding , as well as send more aid in response to flooding in Midland.

Rather than tackle that deficit head on, however, Michigan officials are demanding federal assistance. Gretchen Whitmer had a similar message for Congress, during recent testimony to a House panel:.

President George W. Bush, who got the auto bailout rolling, and President Obama, who approved most of the federal support, both could do so without Congressional approval, using money in the Troubled Asset Relief Program TARP intended to deal with the overall financial crisis. It's virtually impossible that Congress would approve a Detroit bailout this time around, especially with so many other local governments around the country facing their own financial problems.

Related: What's next for Detroit. But even if Obama still had the ability to bail out Detroit, it's not likely he would do so, said Jared Bernstein, senior fellow, at the Center for Budget and Policy Priorities, a liberal think tank. Bernstein was the top economic adviser to Vice President Joseph Biden and on the task force that came up with the bailout plans in He said the carmakers were bailed out because, after the meltdown in financial markets, there was no money available to fund operations at GM and Chrysler as they reorganized.

Without a bailout, both companies would have closed and liquidated , which would have rippled into bankruptcies and job losses across the rest of the auto industry and the U. You only do so if the alternative is a market failure that will have systemic disruptions to the economy," Bernstein said.

I don't think that's the case here.