Pass The Plate

http://www.economist.com/business/displaystory.cfm?story_id=12638642

Summary
Will GM, Chrysler and Fords declare bankruptcy? This is only going to happen if banks don’t give them a lending hand and loan them some money. But luckily, they’re in luck, the directors of European Investment Bank and the Europeans Unions are considering of giving them a soft loan. If they don’t receive the loan, GM will not be able to pay for the bills and will have to declare bankruptcy. The Detroit Three are helping them out. They are planning and feel really confident that they are able to convince the Senate to pass a bill, to receive extra finance so that it will help them out a bit. So now they have 2 options, one is to allow the Europeans to help them out, or hope that the bill will pass next year.

Connections
If GM, Chrysler and Fords don’t receive financial help soon, it will mean that they will have to declare bankruptcy. But if the government comes in and helps them financially, they will be able to continue and produce goods. If any of these car makers does decide to declare bankruptcy it will cause fluctuations in economic activities. The employment rate would go down, and people wouldn’t be able to purchase goods anymore which would cause the economics to drop even more! Also all these car makers are known to be invisible hands, if they don’t continue on, there will be no cars sold anymore because these big companies are planning to declare bankruptcy. So perhaps it is better if the governments comes in and give them a helping hand and make it so it is a natural monopoly or help them out financially.

Personal Reflection
I personally believe that GM, Chrysler and Fords should not declare bankruptcy and even if they do, then who will be supplying us with the cars? Where will be getting our cars from then? Would we get it from some other car makers that are not from our country? Wouldn’t it be better if we help our own country, rather than some other country? I think we should take the risk and hope the Senate will pass the bill for receiving extra finance for the car makers. But in the mean time if the European Investment Banks and Europeans Union do decide to help us, we should accept their loan and pay them back ASAP when the bill is passed. That way we’re not completely helping another country all the way and we’re making US better as well!