During a hearing on a proposed $25 billion federal bailout of the industry Wednesday, GM CEO Rick Wagoner used the D word to describe what might happen if Congress didn't approve some sort of rescue package.
Even though you may think that the current financial trends are the result of the bad behaviour of our banks, the truth is that our auto industry is also one of the main causes of all the social and financial depression that is menacing the US, these days...
"At this point without injections of liquidity, I think it's reasonably probable that some portion if not all of the domestic industry will not survive," Wagoner said. "The way I would explain it to your constituents is it's going to prevent the United States from entering into an economic depression in my view."
Of course, Wagoner and the other automaker executives have an interest in painting a worst-case scenario when asking for a federal bailout.
But the threat of a recession turning into a depression was echoed by Columbia University professor Jeffrey Sachs, who also testified at Wednesday's hearing.
Sachs said that those who argue that a bankruptcy of GM or Chrysler would be better for the economy in the long term should look no further than the damage from the bankruptcy of Lehman Brothers in September.
