Student Summary:
In the past three years, the world economy has been rocked by the sub-prime mortgage crises, bankruptcies, increasing unemployment rates, and a myriad of other economic heartaches. To alleviate these problems the US government began a series of bailouts, which, up until this point, have restored some order to the once sickened economy. For the United States specifically, news and media have focused in large part on the automotive industry and its revival out of bankruptcy. At the forefront was General Motors: An industrial giant since the early 1900 has diminished to bankruptcy, reporting billions of dollars of debt. The debates ensued: Is GM too big to fail? Why shouldn’t we just let it die? What really happens if GM dies? How large will the domino effect be? Despite the resounding public opinion at the time to conserve the tax dollars and let GM suffer the consequence of its actions, the government initiated the bailouts. The government obviously felt justified in bailing out the automotive industry. However, the question remains: was it justified both economically and as a function of government? The government bailout of the car industry, specifically General Motors, was within the role of government and was economically justified.

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