Setting aside all the blame for all the horses that have been beaten these last months regarding the meltdown, I still haven't heard the one thing that needs to be said:
No matter how much money is given/loaned to the auto industry, what good will it do if nobody is buying cars? Last month sales down 40%. Nobody buys cars, no need for car factories. Auto assemblers lose jobs. Nobody buys cars, suppliers have no customers, suppliers lay off more people, less people prepared to buy anything, more people laid off in other sectors because nobody is buying etc etc etc. Self defeating prophesy.
Detroit has to sell cars. Banks have to lend money to do that. Banks not lending. Any newspaper having gloom and doom on the front page, or elsewhere for that matter, editors are summarily executed by hanging.
I suggested to my congress critters that ALL tax deferred savings and pension plans should allow TAX/PENALTY free withdrawals to buy cars. This would get existing money into the system, and no debt. People can start to save for retirement later when the economy starts to rebound. Start using that cash now for free. Bill of sale submitted with income tax forms for proof of purchase. If Detroit was smart they'd slash the costs of 2008 inventory by 50% to get rid of it. That would put a lot of pre owned cars on the private sale market for lower income folks to buy.