Economists are debating whether it would be better for the government to bail out General Motors or for GM to declare bankruptcy. But Time magazine noted that taxpayers will pay either way. The bailout money, obviously, would come out of taxpayers’ pockets. But if GM goes bust, the government will face lost tax revenues and higher unemployment costs and would have to take over GM’s huge pension obligations. A GM bankruptcy could pull down Ford and Chrysler, too. “The decision that Washington has to make,” Time said, “is whether we pay for GM’s survival or for its funeral.”
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