US Auto Industry

GM, Ford and Chrysler, the Big Three US Automobile companies have lost tens of billions of dollars during the past few years, and they will shortly run out of cash. Recently, they asked the government for a bailout. Many Congressmen want to grant them at least $25 billion from the $700 billion Troubled Asset Relief Program on top of $25 billion in low-interest loans approved earlier this year. But the question is, should the government give them such a "free lunch"?

Here is the debate between two well known economists -- Jeffrey Sachs argues that a rescue of the Auto industry is essential, but Gary Becker, says this is not a good idea at all.

HT to Mankiw.