Paulson, Bernanke Stand Their Ground

There are many camps advocating for or opposing a variety of different measures. The auto industry is seeking $25 billion for emergency loans, and House Speaker Nancy Pelosi (D., Calif.) has tapped Rep. Barney Frank (D., Mass) to draft an aid package. Supporters fear that the failure of a huge company like GM could be disastrous for workers, debt holders and other companies along the automotive supply chain.

But others contend the industry has simply lost its competitive edge, and doesn't deserve taxpayer dollars to bail it out of a problem that was long in the making. Critics also point to examples like Delta (DAL Quote) and UAL (UAUA Quote), which filed for, then emerged from Chapter 11 without the government's help.

"We let the airline industry go bankrupt and we still see planes in the air," says Steve Stanek, a research fellow at The Heartland Institute, a free-market advocacy group.

In addition, bailing out automakers could also be a slippery slope: What about retailers coping with cash-strapped consumers, or newspaper publishers, or commodity-linked companies that suffer when prices rise or fall? Robert L. Porter, an assistant professor of finance at Quinnipiac University, says that the financial industry should stand alone when it comes to taxpayer-funded support.

"We absolutely must have a well-functioning financial system if we hope to have economic prosperity," says Porter. "But, in my opinion, we don't need to have an auto industry that has their headquarters located in the U.S. Foreign auto makers seem to be doing quite well in the U.S. market and I question the relevance of where the headquarters are located."