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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: Peter Dierks who wrote (29893)	11/24/2008 11:21:22 AM
From: DuckTapeSunroof	Read Replies (1) \| Respond to of 71588

Re: A bankruptcy could potentially result in shedding the retiree health benefits and government taking over the retirement benefits. The implied subsidy would help to even the playing field with most other nations that subsidize their vehicle industries with benefits in these areas." Yes, I know. Health Care benefits and Pension Plan benefits But let's be clear: As far as the pension benefit payouts under a government-assumption of responsibility --- federal law CAPS payouts at 'no more than' $40,000 a year... so many current pensioners would see very large cuts in their payouts. Although I know far less about the industries Health Care plans, I assume that a government takeover would reduce payouts there as well. As I have long argued, no 'loan' can save this industry. It's over-head of on-balance-sheet debt and off-balance-sheet-obligations is FAR TOO HIGH to be a viable business. Bankruptcy (where all current equity is extinguished... and likely around 1/2 of the debt is force-converted into new equity, producing the industries new owners along with a reduced debt load) is the only option that can 'save' an American auto industry. HOWEVER... there are still major down-sides to this route: The government assumption of health care and pension obligations will wipe out the curent budgets of these respective Agencies (Pension Guaranty Agency, etc.) and will require probably an immediate trip to Congress for much larger appropriations and a rise in the fees they access on companies for this insurance, just to be able to fund these government assumptions of the debt. There is still the 'Moral Hazard' question as well. If we are to NATIONALIZE the truly massive health care costs of one of our largest industries (giving them a competitive advantage over others...) then WHAT ABOUT OTHER AMERICAN INDUSTRIES? Why should THEY be left standing on the down-tilted portion of the playing field, forced to try to march uphill all the time when ALL of their competition in the developed world doesn't have to labor with carrying health care costs --- because of the level playing field and benefit that national standardized health care gives them? So... I remain OPPOSED to 'special benefits' to just one industry (such as the auto industry....) All of our companies face foreign competition with this large cost structure advantage. Instead of throwing $50 or a hundred Billion or so (low estimates for what the industry might likely need just to survive for another year...) why not use that same amount as down-payment of health care reform, with the goal of providing the same financial benefits to ANY and ALL American companies?