The Bush administration should lend money to the ailing U.S. auto industry immediately, says economist Jeffrey Sachs.
“A partnership with government is vital and should begin this week,” Sachs writes in The Washington Post.
Not helping automakers could push the economy into a depression, Sachs maintains.
Helping them right away could mean grabbing leadership in manufacturing cars that get 100 miles or more per gallon and increase national security, climate security, and U.S. global competitiveness.
“The technologies that will win the day are in sight; industry has already made important advances,” Sachs writes.
“With the path-breaking plug-in hybrid Chevy Volt set to arrive in 2010 and several new hybrid models on the way, American-made fuel-cell cars may be a large-scale reality within a decade,” Sachs says.
Sachs believes that restructuring under Chapter 11 bankruptcy rules would kill U.S. automakers, now unable to get loans in ravaged capital markets.
In a recent CBS interview, President-Elect Barack Obama agreed that automakers are struggling but said no-strings payments would not help.
"For the auto industry to completely collapse would be a disaster in this kind of environment,” Obama said.
“So it's my belief that we need to provide assistance to the auto industry. But I think that it can't be a blank check.”
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