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A Danger to Detroit In Low Gas Prices
Tuesday, November 18, 2008
The Washington Post -- The big game in Washington these days consists of running around dealing with the problems of the Detroit Three automakers, formerly the Big Three.

But all the to-ing and fro-ing about how (or whether) to keep General Motors, Ford and Chrysler out of bankruptcy is ignoring the elephant in the room -- lower gasoline prices. As you almost certainly know, they've fallen about 50 percent from the record levels they reached in July, making them one of the few bright spots in our economic picture.

So let me fulfill my traditional role of skunk in the garden party and suggest that these lower gas prices aren't an unalloyed good thing. Let me also suggest that we jack them up, sharply, by adopting a big honking tax on gasoline.


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JT
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Message Posted: 11/18/2008 8:56:48 AM  Ignore JT Report Abuse
Tuesday, November 18, 2008
The Washington Post -- The big game in Washington these days consists of running around dealing with the problems of the Detroit Three automakers, formerly the Big Three.

But all the to-ing and fro-ing about how (or whether) to keep General Motors, Ford and Chrysler out of bankruptcy is ignoring the elephant in the room -- lower gasoline prices. As you almost certainly know, they've fallen about 50 percent from the record levels they reached in July, making them one of the few bright spots in our economic picture.

So let me fulfill my traditional role of skunk in the garden party and suggest that these lower gas prices aren't an unalloyed good thing. Let me also suggest that we jack them up, sharply, by adopting a big honking tax on gasoline.

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REPLIES (newest first)
Z51Corvette
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Austin

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Message Posted: 11/19/2008 9:59:08 PM  Ignore Z51Corvette Report Abuse
A big honking tax on gasoline... ARE YOU NUTS!!!! The American public is being taxed at record levels as it is... from Credit card interest to Health care costs and the UAW costs added to every American car built... Cost the Japanese manufacturers... can avoid... What is that cost per car... between 1,000 to 1,200 PER CAR!!! This came from an Big Three insider!
celtic14
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Florida

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Message Posted: 11/19/2008 2:50:37 PM  Ignore celtic14 Report Abuse
Lenguado wrote: "Though NASCAR will be seriously different having to root between Toyota, Nissan or BMW......"

Seems to me that the vast majority of NASCAR fans root for or against a particular driver, not a particular type of car. So (just for example) Jeff Gordon's fans won't abandon him if a Toyota starts sporting #24, nor will his detractors rally to him.
Martinman
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Mississippi

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Message Posted: 11/19/2008 2:07:53 PM  Ignore Martinman Report Abuse
Using the airlines is probably the poorest form of logic I've seen.

The airlines do not maintain an extensive spare parts network to "fix" your airline ticket 2-, 5-, or 10-years from now.

The airlines do not have extensive dealership networks to provide maintenance and service to your ticket.

The airlines do not "warrantee" your ticket for up to 10-years or 100,000 miles.

The airlines do not take you to work, to pick up your kids from school or take them to the Friday night football game.

The airlines simply provide a "service" to transport you to some destination in return for a cash-fare. And until that airline ceases operations, you can exchange your ticket with other airlines just as if it were cash to fly on just about any carrier.

Airlines provide a "point-of-sale" service. The domestic auto manufacturers sell vehicles that are "capital assets" that retains a value over time, and can be repeatedly reused and resold.

But most importantly.

In bankruptcy, people will still fly with that airline because it is a point-of-sale service. But recent surveys of the American public found that more than 70% would not buy a vehicle from a manufacturer in Chapter 11 bankruptcy reorganization.

People, QUIT LISTENING TO THE POLITICALLY MOTIVED TRASH-TALK-RADIO and educate yourselfs as to the outcome of a bankruptcy failure by ANY of the Big 3 domestic automakers.

While you're at it, start here:

3 Million Auto Industry Jobs at Risk
pitchingcoach
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Michigan

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Message Posted: 11/19/2008 10:48:25 AM  Ignore pitchingcoach Report Abuse
From a purely selfish standpoint I don't want the Big 3 to be bailed out. Decisions have been made by those in charge that have been horrendous. How could they not be building cars that get higher gas mileage? The Japanese do it!

But from the standpoint of jobs and people how many people not emplyed directly by the Big 3 will lose their jobs. Can we afford to put millions of people on the unemployment lines. Better decisions need to be made at corporate headquarters.
gasbuddy111
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San Diego

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Message Posted: 11/19/2008 10:01:39 AM  Ignore gasbuddy111 Report Abuse
If all I have to do is 'honk', then fine. Otherwise this approach only adds to the problem.
laoloup
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Montreal

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Message Posted: 11/19/2008 9:43:56 AM  Ignore laoloup Report Abuse
The airline industry has been into bankruptcy and out of it, and we're still taking flights with them. Of course there will be casualties, so be it: they deserve it.

As far as a gasoline tax is concerned, Canadians have been paying for it for years. That's why gas price here is higher in Canada albeit being an important oil exporter. End result, Canadians are much more sensitive to fuel efficiency and drive smaller cars. Don't forget the fact that gas is subsidized in the U.S.
purvismike
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Wisconsin

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Message Posted: 11/19/2008 9:35:47 AM  Ignore purvismike Report Abuse
The big 3 wouldn't be asking for the money if the Credit Markets were as open as they should be.
purvismike
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Wisconsin

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Message Posted: 11/19/2008 9:31:31 AM  Ignore purvismike Report Abuse
Does anyone remember this??? "Its the ECONOMY stupid!"
Lenguado
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Orlando

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Message Posted: 11/19/2008 9:27:11 AM  Ignore Lenguado Report Abuse

Ok, Riddle me this Batman....

So WE (yes, you, I and our grand-children's grand-children) finance this 'Bail-out' of the Unions - - um, I mean the Big 3 US auto makers.... with the promise that these are "loans" - and that these "loans" will be paid back.

Then, the 'Big 3' use this money to help them limp along for the next year or so - but due to the constraints placed on them by our government and their own Unions, they still can't make a go of it. (I for one, won't be buying a vehicle from any of them ever again if they get this "bail-out"...)

OK, now the question, "How does a BANKRUPT company pay back the American citizens the "loan" they are given, if they go out of business?"

Just asking......
laoloup
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Montreal

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Message Posted: 11/19/2008 9:25:17 AM  Ignore laoloup Report Abuse
The unions wanted better deals and they got them. So now it's time for them to figure out whether those are good deals if the big three go belly up. Let the unions tide high water with their employers. Bankruptcy is the best way out for the automakers because a bailout can only encourage laggards and and more greediness.
USAFAMMO
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Virginia

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Message Posted: 11/19/2008 9:18:45 AM  Ignore USAFAMMO Report Abuse
No bail out...Where do we stop???
mtnman724
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Pittsburgh

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Message Posted: 11/19/2008 9:17:56 AM  Ignore mtnman724 Report Abuse
Dodge is going to do well with the 2009 diesel...26 MPG for a heavy duty truck.
laoloup
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Montreal

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Message Posted: 11/19/2008 9:15:45 AM  Ignore laoloup Report Abuse
The collapsing three had the opportunity to make fuel efficient cars but the profit margin is not as good as Hummers. Then again, Hummers are what many Americans want - for their ego. So whose fault is it? The big three or the consumers?
kwmcbrid
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Iowa

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Message Posted: 11/19/2008 9:15:02 AM  Ignore kwmcbrid Report Abuse
The biggest problem with tax increases is they create inefficiency. In other words, if the government can't make ends meet the logical solution is to raise taxes. They might even use a gas tax increase to subsidize the bankrupt three. But more tax revenue lessens the need to find efficiencies. The bankrupt three will not emerge financially healthy unless they more toward austerity. The old saying holds true: "If you give a man a fish you feed him for a day, if you teach him to fish you feed him for a lifetime.
Lenguado
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Orlando

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Message Posted: 11/19/2008 9:12:25 AM  Ignore Lenguado Report Abuse

Ahhh Ha!!! The new trend in bashing Capitalists emerges on this thread.

If you are for TAXING something out of existence and having the government (smarter than you...????, not) DIRECT which products will be produced, you are "INTELLIGENT" ~ ~ ~ ~

Buuuut - if you are for letting the Free Market move and sway between all of the alternatives, based on availability of resources, efficiency of resource utilization and best cost / affordability - - - then you are STUPID....

Hhhmmmm, I get it now! Sieg Heil!! Sieg Heil!! Sieg Heil!!
AL_Crazy_Gal
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Montgomery

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Message Posted: 11/19/2008 9:10:17 AM  Ignore AL_Crazy_Gal Report Abuse
They made their bed, let them lie in it. They had the chance to improve the world ecology, economy AND be leaders in the industry. They chose to rape world oil, polute the air and line their pockets while the American people got less quality for more $$$. We're not stupid enough to keep buying American and keep screwing ourselves.
CCMFreak2
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Kentucky

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Message Posted: 11/19/2008 9:09:55 AM  Ignore CCMFreak2 Report Abuse
Give me a break! A car's life is not defined by the MPG, but by the total number of miles placed upon it. Some cars have better lifespans than others. And people notice the lifespan. That's why you can still find an old Honda Civic with 200,000 miles still going for almost $2k in my area. Shoot, my '93 Honda Civic is about to hit 200,000 miles, and still gets 35 mpg! People notice quality and efficiency. Gas prices have nothing to do with the fact that GM can't/won't keep up with the quality that is found in Toyotas and Hondas.

I say let the marketplace rule itself. These guys have known for years what people want by simply watching sales reports. You don't give them what they want, someone else will. Plain and simple.
e_jeepin
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Michigan

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Message Posted: 11/19/2008 9:08:50 AM  Ignore e_jeepin Report Abuse
cwgas: Give us a list of "inefficient" mainstream Detroit cars that compete against the transplant imports by segment. H2 doesn't count as it is only a niche vehicle and no longer produced.

I made this point yesterday by listing the fueleconomy.gov statistics which showed nearly identical fuel economy for comparable segment classes.

Do the research before posting

This isn't a Detroit problem, its a banking crisis! Every manufacturer needs access to bank lending to operate daily. GM has been cut off, Toyota has not.

Wall Street is deciding that Detroit needs to fail. Not good.
downdashore
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Newfoundland

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Message Posted: 11/19/2008 9:08:06 AM  Ignore downdashore Report Abuse
Sure, everyone needs more taxes at this time. Get real.
doobrah
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Virginia Beach

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Message Posted: 11/19/2008 9:07:57 AM  Ignore doobrah Report Abuse
Yeah, well, someone needs to make an executive decision and tell them to DO IT.
hank1326
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Los Angeles

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Message Posted: 11/19/2008 9:05:38 AM  Ignore hank1326 Report Abuse
Ditto to parsec. Meanwhile, keep on conserving.
Lenguado
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Orlando

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Message Posted: 11/19/2008 9:05:33 AM  Ignore Lenguado Report Abuse

Blah, Blah, Blah - Detroit should do us all a favor and sink into the earth and be covered up with a garbage dump landfill - and then covered over and made into golf courses.

Ford, Chrysler & GM slit their own throats years ago when they succumbed to the violent tactics of the Unions. Let them ALL stew in their own muck....

As for me, if this Union "bail-out" goes through, I will NEVER buy an "American" auto company (Ford, Chrysler, GM) automobile EVER again - - and I am a tried & true Ford guy.... Toyota is looking better and better all the time.

Though NASCAR will be seriously different having to root between Toyota, Nissan or BMW......
gvrocha
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Indiana

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Message Posted: 11/19/2008 9:05:27 AM  Ignore gvrocha Report Abuse
Honestly, intelligent people will decide based on prices.
So, taxing should drive consumption down while generating revenue to fund research in alternative energy.

It seems like you kill two birds with a stone.

As for the old tradition of trashing taxes, all I have to say is: Wake up, guys!!!
Cheap gas is a thing of the past: oil production has peaked and it is not coming back.
If you don't pay the higher taxes now and no alternatives sources of energy for transportation are made available, we will all be paying through our collective noses in 10 years or so!

G.
Dennis783
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Wisconsin

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Message Posted: 11/19/2008 9:05:18 AM  Ignore Dennis783 Report Abuse
we don't need more taxes!
dyeh
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Illinois

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Message Posted: 11/19/2008 9:04:36 AM  Ignore dyeh Report Abuse
Let them go bankrupt. That's the free market's way of weeding out the weak.

And 'bailouts'? Don't make me laugh. Protecting the weak is only prolonging the cancer, eventually it will get so big, it'll kill you.
cenobite9
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Memphis

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Message Posted: 11/19/2008 9:02:34 AM  Ignore cenobite9 Report Abuse
I'm barely getting by as it is... the lower gas prices have really helped me out and I drive a fairly fuel efficient vehicle (around 25 MPG). I don't see how a gas tax will help out at all. These automakers put themselves in this situation so they need to get themselves out of it without hurting the consumers.
spheremaker1
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Arizona

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Message Posted: 11/19/2008 9:02:25 AM  Ignore spheremaker1 Report Abuse
the guy sounds like a liberal pinko commie.. what does this fellow do for mankind??? anything???
Rajah
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Illinois

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Message Posted: 11/19/2008 9:01:33 AM  Ignore Rajah Report Abuse
"If people were generally intelligent".. Dream on Chemist74. That's never been the case.
cwgas
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Charlotte

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Message Posted: 11/19/2008 9:01:12 AM  Ignore cwgas Report Abuse
they need to all make better cars that everyone can afford to purchase to replace all of the ineffecient cars... basically start over. If every car is replaced that is a lot of cars they need to make and therefore can stay in business without having to be greedy or excessive in charges.
parsec
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Toronto

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Message Posted: 11/19/2008 9:01:03 AM  Ignore parsec Report Abuse
Let him pay the tax. Even double!
Newly2
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Florida

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Message Posted: 11/19/2008 9:00:22 AM  Ignore Newly2 Report Abuse
BS is right, keep going down!
Avalanchegirl
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Denver

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Message Posted: 11/19/2008 8:59:58 AM  Ignore Avalanchegirl Report Abuse
gas tax? please
AZDaisy
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Arizona

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Message Posted: 11/19/2008 8:59:38 AM  Ignore AZDaisy Report Abuse
what a idiot
acknot
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Seattle

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Message Posted: 11/19/2008 8:58:55 AM  Ignore acknot Report Abuse
whatever
Xspecht
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Idaho

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Message Posted: 11/19/2008 8:57:02 AM  Ignore Xspecht Report Abuse
Let them file bankruptcy and renegotiate the union contracts that put them there in the first place. We shouldn't tolerate mediocrity.
Ernman
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Orlando

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Message Posted: 11/19/2008 8:55:34 AM  Ignore Ernman Report Abuse
Maybe Warren Buffett and Bill Gates should loan money to GM...or buy tons of GM stock, so GM can get some cash flow.
mattf373
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Message Posted: 11/19/2008 8:55:28 AM  Ignore mattf373 Report Abuse
crazy
chemist74
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Cleveland

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Message Posted: 11/19/2008 8:55:27 AM  Ignore chemist74 Report Abuse
If people were generally intelligent, there would be no reason to consider a fuel tax increase.

Intelligent people would avoid buying gas hogs unless absolutely needed no matter what fuel costs.
Any intelligent business manager has known for over 30 years that gas prices would increase sharply.
Any intelligent politician knew long ago that alternate energy was essential.

Unfortunately, most people are like spoiled children. They want what they want when they want it no matter what the future impact.
VTROCK
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Detroit

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Message Posted: 11/19/2008 8:55:12 AM  Ignore VTROCK Report Abuse
A gas tax is never the answer. The little guy is unfairly impacted by a gas tax because he still has to get to work.
XfireSRT6
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Atlanta

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Message Posted: 11/19/2008 8:54:15 AM  Ignore XfireSRT6 Report Abuse
I'm ALL FOR A BIG TAX increase on gasoline! How about $1 to $2 per gallon. And I'm NOT CRAZY, it would be the best thing for AMERICA! Of course the TAX must go only towards the following:

#1) Tax Credit Rebate directly to the consumer that buys a HIGH MPG vehicle. This will drive the average buyer to look at purchasing high MPG vehicles. This will force the car makes to build the types of vehicles we need as the demand will be huge from the consumer end. (And when I say high MPG vehicle I mean as in 35MPG Combined Rating minimum to get any rebate $, and have a sliding scale with more $ rebated as MPG goes higher..... IE By a Smart Fortwo and get $2000 tax credit or rebate, by a Honda Civic Hybrid get $3500, buy a Toyota Prius Hybrid get $4000 rebate etc etc..... By a Hybrid SUV that only gets 25MPG then you get ZERO $ rebate.)

#2) Fund fast, efficient, prevalent, PUBLIC TRANSPORT PROJECTS: Mostly RAIL, IE Pay for intercity light rail, Pay for Intra-city HIGH SPEED RAILROADS (So there is some competition for the airlines like is common in Europe like the TVG, ICE, & other bullet trains).
Markel
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Chicago

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Message Posted: 11/19/2008 8:53:45 AM  Ignore Markel Report Abuse
I'm having trouble paying my monthly bills. I demand a personal government bailout.
Drill_It
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Michigan

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Message Posted: 11/19/2008 8:52:54 AM  Ignore Drill_It Report Abuse
This is not good....
WufMan66
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Raleigh

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Message Posted: 11/19/2008 8:52:03 AM  Ignore WufMan66 Report Abuse
File Chap 11 and void the stupid UAW contracts. That is what is really killing the auto companies
wtstms
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West Virginia

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Message Posted: 11/19/2008 8:51:03 AM  Ignore wtstms Report Abuse
say no
rbdesigns
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Modesto

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Message Posted: 11/19/2008 8:49:30 AM  Ignore rbdesigns Report Abuse
I think what he is trying to say is a tax could ballance out the price of gas, much like most energy companies do with our electric bill. You pay more during spring and fall so you get to pay less during summer and winter when your bill is higher.
txyankee
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Milwaukee

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Message Posted: 11/19/2008 8:49:27 AM  Ignore txyankee Report Abuse
quit there crying and file chapter 11 then maybe we will give them some help. If they don't then everyone will be driving a foreign car. Which they now (today) are cheaper and get better gas mileage. Wake up detroit.
The same companyies that manufa ture items for them are doing the same for the toyota honda and soon kia right here in the US anf employing americans. Oh and they aren't paying big brother UNION dues and contra cts..
gjn
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Ontario

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Message Posted: 11/19/2008 8:49:20 AM  Ignore gjn Report Abuse
kthyme is right
Kthyme
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Fort Worth

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Message Posted: 11/19/2008 8:47:51 AM  Ignore Kthyme Report Abuse
They need to file bankruptcy & regroup! Just like any other company. Government won't come bail us out with our personal mishaps!!!
4warned
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Michigan

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Message Posted: 11/19/2008 8:45:54 AM  Ignore 4warned Report Abuse
How about a spin on this tax thought. Use the tax money to provide the American auto makers low interest loans. Also like the article suggest provide tax refunds to those that qualify. Could be a win win situation.
WillyG
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Cincinnati

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Message Posted: 11/19/2008 8:45:34 AM  Ignore WillyG Report Abuse
How do you figure ? To me these lower gas prices - which by the way did NOT drop 50% from it's highest point, but rather returned back to it's starting point right before they were jacked up in the middle of the year. Anyway . . . I see these lower gas prices a chance for the Big 3 to get rid of all their big gas guzzlers, now that gas prices are down, and focus on building more fuel efficient vehicles. What are you accomplishing by raising the prices back to the $4+/gal ? Price of food, airline tickets, school transportation, etc. etc. are going exponentialy way up, while our incomes are staying the same.
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