In other words, General Motors is far too massive, far too interconnected, and far too important to the American -- and, by extension, the wold -- economy to let fail. The ripple effect would shut down small and giant companies alike, ultimately ending in the collapse of the other two American automotive giants, Ford and Chrysler.

And that is just in the United States.

So how to forestall such a collapse?

President-Elect Barack Obama favors a plan that would take some of the money from the discretionary fund known as the $700 billion Wall Street bailout and shore up the flagging automotive industry. However, Secretary of the Treasury Henry Paulson opposes that idea. Although he maintains that he is open to ideas that would aid the auto makers, Paulson does not want any of the money to come from the $700 billion, which was set up to be apportioned to lending and banking institutions. The Democrats, including President-Elect Obama, see that $700 billion bailout money as taxpayer money to be used to help whoever might need it, but Paulson holds the discretionary power to dole out the money to whom he sees fit - a power given him by Congress in the bailout legislation. Paulson suggests an emergency stimulus package or loan of $25 billion, such as the one presented the automakers in September.

President Bush is also opposed to lending money to automakers that was set aside for the financial industry. Tony Fratto, a White House spokesperson, said, "We do not welcome efforts to weaken the Treasury program. The Treasury program is working to deal with the financial crisis, and that is what it ought to continue doing."

All told, the automotive industry is asking for an additional $50 billion -- $25 billion for operations and $25 billion to cover union costs.

Time magazine reports that General Motors has seen a 47% decrease in overall sales last year. They automotive giant has seen a 43% decline already this year. And although they corporation has cash funds, the money is running low. Going into 2008, General Motors had a cash pile of $30 billion to draw upon. It now has only $16 billion. And the corporation is dropping new vehicle designs, cutting costs and closing plants, and trimming employee roles are not slowing the losses fast enough.

The downward spiraling national economy is making its presence felt in Detroit.

Unemployment in the United States is 6.5%, the highest it has been in 14 years. Rates are trending downward. If General Motors or all of the Big Three collapse, not only do the unemployment roles grow and become stressed, but so do the pension funds guaranteed by the federal government.

The question that must be asked is: Should Congress rethink the discretionary power given Treasury Secretary Paulson. Many think so. Then again, many thought giving Paulson and Federal Reserve Chairman Bernanke that much discretionary power of so much money was foolhardy to begin with.

Democrats are going ahead with a measure to pull money from the $700 billion bailout fund. Congressman Barney Frank (D-MA) believes that many of the Republicans opposed to a Big 3 Bailout plan might be brought around to support it if confronted with a possible public backlash should one or all of the automakers fail. A majority vote from Congress would also force president Bush's hand in the matter.

Time magazine's Bill Saporito may have said it best in his article, "Is General Motors Worth Saving?": "But ultimately, whether GM is dead or alive, the taxpayers are on the hook for billions, for everything from lost tax revenues to higher unemployment costs to taking over GM's pension obligations. The decision that Washington has to make is whether we pay for GM's survival or for its funeral."

And if Washington ultimately decides to pay for the funeral, expect it to be the lead funeral in a massive cascade of successive funerals.

And no one will have to worry about whether or not to call the economic crisis the nation is in a recession anymore. Because it won't be.

It will have entered a full blown Depression.

******

Sources:

Time.com

WashingtonPost.com