Wanna know how much sense a bailout makes?

Read this: "Autoworker chief pleads for government to save his job by stealing others' money to give to him".

If you want to know how well an American automaker bailout will go, look no further than AIG, which made the very same claims: "too big to fail," "bridge loan," "we need time to reorganize." The government gave AIG an initial $85 billion infusion, described as a "loan" -- which doesn't make sense, because loans are made to be repaid, and AIG wasn't expected to pay it back. It does make sense when one realizes it was all a bait-and-switch: the government didn't intend to make a real loan, but to buy out a strong controlling portion of AIG. And as scary as it should be to any liberty-loving person, it was merely a prelude to nationalizing the rest of the major insurers and other big industries.

And by the way, do the math: if you get 79.9% ownership for the initial $85 billion, then what does $152.5 billion get you? Doesn't it seem like the investment is effectively throwing money into a black hole? If you were a private investor who put $X into a badly performing company for 80% ownership, and suddenly you had a capital call for another 79.4% of your initial investment, wouldn't you start wondering if you should pull out while you can and write off the losses?

AIG claimed it would sell off "assets" to repay the loan, and the loan is necessary to keep it afloat because there's insufficient income to meet its debt obligations (in no small part from credit default swaps). If this were done by an individual, the situation would be someone who has a sudden cut in earnings, gambled away the next several months of pay, owes money right now to a great many people, and has been refused by banks for a loan to repay his existing debts. He just doesn't have the income to repay the latest loan. AIG effectively said it needed a payday loan for the next six months, which it will use to pay off the people currently breathing down its neck, and it will repay the latest loan by selling its furniture. Ask yourself: who in his right mind would become the next creditor to such an irresponsible person? No rational person would.

H/T Billy.