And giving zero-interest loans to people who are the same crappy debtors (yes, even though GMAC has said these are "prime debtors", that means the minimum FICO score is 621, when the national median is over 700) AND who are now much more likely to default than they ever were, say three years ago, (which was already high) due to lowered wages/greater chances to be laid off is a good thing?
Obviously it is SS. Any 'default' can be taken care of by simply writing off the debt (i.e. printing the money and ignoring the obsession with being 'paid back'). The point in a deflation/depression is to get things moving, to create vast amounts of fiat currency to change behavior (create consumption). There is no reason at all to worry about 'getting paid back' - this is all just psychological, and there is no 'real money' behind it. In fact being 'paid back' is not a particularly helpful occurrence, in this macroeconomic context.
To me, it makes it even more clear that GM and GMAC are likely is going to go belly-up at some point in the near future, probably after a few more rounds "government assistance" from the taxpayer.
Why would they go belly up? They will receive whatever is necessary.
This further reinforces the rather interesting point that, although the credit markets have loosened up a little, any loosening is entirely due to the federal government backstop. Unless this changes in any material sense (and it most likely won't because the Feds seem increasing interested in getting so involved in the credit market that they are shutting out private entities), the end game (TSHTF) is still the most likely *final solution*.
Credit can only be 'loosened' by the State, SS, in good times or bad. You need to get over the idea that there is a 'private' aspect to economics. This dichotomy is a false one.
Giving O% interest loans to failed companies is a bad policy. What happens if the companies fail anyway and the gov;t is out billions of dollars. Why not give 2 or 3% interest loans to small businesses who make 2/3 of the jobs anyway.
The companies didn't fail, State policy failed us all (including these companies), NC Yank. As for 'small business' the jobs it creates are mostly not worth having. UAW jobs are some of the last few 'real jobs' - as in they pay a living wage - left in the US.
