American automobile makers GM, Ford and Chrysler are facing collapse. Will the Federal Government help? Why should they?

All three manufacturers are facing financial crisis and have an expected one year of life left in them unless they get a bailout from Washington.

The question is, should they get the bailout? If so, why?

We believe the answer is very simple - yes, they should get a loan, not a gift, to bring them out of crisis and tide them over until the general economic crisis facing the Nation is on its way to recovery.

The three manufacturers, humbled by this crisis, are begging Washington policymakers to provide some form of bailout, while pundits on financial media outlets blast the companies for their poor business practices in the past.

"This crisis facing Detroit automakers is not solely their fault - it is the result of economic conditions far beyond the control of the Big Three's boards or management." says Dr. Robert Angelone of The Epicurus Institute.

"The lack of liquidity in banking has created a vacuum in auto lending, making it impossible for potential auto buyers to obtain financing at any rate. This has caused a collapse in sales and a fundamental crisis having nothing to do with fuel efficiency or labor contracts" Angelone added.

The government is in a unique predicament. Do they spend the money on the hope that the three manufacturers will survive or do they allow them to fail, costing the nation millions of jobs and exacerbating the overall economic crisis and increasing foreclosures by perhaps 700,000?  Clearly, the right course of action is to provide a bailout loan of some kind.

One option is for either The Treasury or FED to provide a guarantee on a loan made by a financial consortium of fuel companies. The only problem with this is that there's no incentive in this lending for the manufacturers to improve fuel efficiency.

Another option is to nationalize the companies, reset the labor contracts where they have disparity with other competitors in the country and take control over fuel efficiency standards.

But the one we like best is the most simple, but as Einstein said "not simpler"... to establish a line of credit at the FED, make contracts with all three companies and put them on notice that they have 12 months to bring levels of fuel efficient car production to 60% or be nationalized.

We also believe the time is come for the Nation to establish an Economic Development office as a Cabinet agency, with powers to override disparities in the country. An example of this is something facing domestic automakers - where Southern states attracted foreign manufacturers with labor rates half those of Detroit. While this was a sound policy for the South, it has hurt Detroit. Such inequity should be resolved fairly.

As for the Unions, while we believe in the benefits of organized labor, we must point out that for the rates being paid under present contracts, makers could hire twice as many people if the rates were equal to those in the South - or, they could continue paying health benefits and pensions in a safer environment. We don't criticize the labor unions for their diligent efforts to protect their membership, but ask them, is past practice penny wise or pound foolish?

Washington shouldn't worry too much about the loans to automakers. They're probably the safest loans they could make, provided the govenment includes select provisions to create incentives for growth and economic management.

In this case however, we urge government to place a non-voting member on the Board of each company as an economic policy advisor. That should keep them in check. Treasury or FED officials should get a revised, updated business plan from each, with accountability for execution of that model.