$700 billion is going somewhere, and American automakers want their share.  A separate lump sum would be fine by them, too, of course, so long as it’s really big and is distributed in the near future.  Automakers presented their case to a Senate committee earlier today.

If the American auto industry failed, there would be some pretty huge effects.  Consider automobile sales, for starters.  Who’s going to buy a car when the company that made it might not stick around to back a warranty and provide parts and service?  If many people start to think about this, we’ll see a vicious cycle.  Not many new cars will be on the road that don’t sport Honda, Toyota, and other foreign badges.

There are other looming problems, too.  According to Bill Vlasic, General Motors’s Rick Wagoner said, “The societal costs would be catastrophic - three million jobs lost within the first year, U.S. personal income reduced by $150 billion, and a government tax loss of more than $156 billion over three year.”

Still, if you look at an issue of Consumer Reports or pick up just about any car magazine, you’ll find that American automobiles rarely measure up to the import competition.  So it’s hard to place the blame on the overall economy or see why taxpayers should step in to save the U.S. companies.

Lawmakers did not come to a decision, of course.  Stay tuned.