About that “loan”: Obama team writes off $7 billion taxpayers loaned Chrysler

Kandahar said:

That's not true. Bailouts are essential when A) The entire industry is on the brink of collapse, rather than a few specific companies;

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No they're not.

What's essential is that the government doesn't get so involved in the economy that it causes entire industries to collapse.

Kandahar said:

B) The industry in question makes the entire US economy function;

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Don't have a one of those.

Kandahar said:

C) The bankruptcy of the weakest links in the industry will create a cascade effect of bankruptcies.

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Oh, was Toyota going to file Chapter 11 if GM died?

No.

Was EVERY bank going to fail because the biggest ones were about to?

No.

Scarecrow Akhbar said:

No they're not.

What's essential is that the government doesn't get so involved in the economy that it causes entire industries to collapse.

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The banks were interdependent on one another to such a large degree that when a few of them started going sour, many more did. If it was all the government's fault, it doesn't explain how bad US mortgages resulted in the economic collapse of Iceland, Hungary, Argentina, and Pakistan.

Scarecrow Akhbar said:

Don't have a one of those.

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The entire economy would (and did) grind to a complete halt without access to capital.

Scarecrow Akhbar said:

Oh, was Toyota going to file Chapter 11 if GM died?

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Nope. Toyota, along with the other surviving auto companies, would absorb GM's share of the market, thus benefiting in the long-term. Hence why I opposed the bailout of GM and Chrysler. Try to keep up.

Scarecrow Akhbar said:

Was EVERY bank going to fail because the biggest ones were about to?

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A lot of them would, yes. If the big ones go bankrupt, then many banks to whom they owed money would go bankrupt, then many banks to whom THEY owed money would go bankrupt, etc.

Here is another side to this story.

Apparently a lawyer for the senior creditors is asking the bankruptcy judge to throw this out because of the 5th amendment.

"No person shall be held to answer for a capital, or otherwise infamous crime, unless on presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation."

Threatened Chrysler creditors given delay - UPI.com

NEW YORK, May 4 (UPI) -- A New York bankruptcy judge honored a request from threatened creditors to delay a hearing on bidding procedures for Chrysler LLC's assets Monday.

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Among Monday's developments, an attorney representing creditors said some had received death threats over their role in Chrysler's demise.

Attorney Thomas Lauria asked Judge Arthur Gonzales to keep the identities of the threatened creditors a secret. They have been referred to police and the FBI for assistance, the News said.

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The governments of Canada and the United States have agreed to loan Chrysler $10.5 billion to help the company restructure.

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I wasn't aware that Canada had also loaned them money.