Allowing the U.S. automakers to declare bankruptcy would worsen the credit crisis, Rep. Barney Frank, D-Mass., said Friday during an auto bailout hearing.
If the the Big Three Detroit automakers are permitted to "stop paying their debts" through bankruptcy, "it would greatly exacerbate the credit crisis," Frank said in his opening remarks at the House Financial Services Committee hearing.
"For us to do nothing ... in the midst of the worst credit crisis and unemployment situation in the last 70 years would be a disaster, said Frank, who is chairman of the committee.
But if the govt bails them out guess who just payed their debts?
Ranking minority member Rep. Spencer Bachus of Alabama said the financial crisis has overwhelmed "the reality ... that Detroit is making good cars."
U.S. automakers must not be allowed to fail because it would have a detrimental effect on the economy, Bachus said.
"Having said that," he said. "the No. 1 obligation is to the taxpayers. Government has no money of its own. In order to give ... it has to take."
Well at least Bachus remembers that much. Maybe they just write over every urinal in the capital building.
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