Another Day, Another Handout  

The BBC reports that American carmakers are likely to get a $25 billion handout to help them build greener cars and to avoid bankruptcy (if they'd done the former a few years ago they wouldn't be facing the latter now) - Car giants set to get $25bn loan. Compared to the handouts (direct and indirect) that have made (or are making) their way to the "defence", oil and finance industries its small potatoes, but you still have to ask why the government is constantly subsidising large private enterprises.

US car giants may be on course to get a $25bn (£13bn) government loan to help them build greener cars and ease them through tough economic times. The House of Representatives voted to back a spending bill that includes a low-interest loan for the industry.

The US government has only bailed out a carmaker once before and that was with a much smaller amount of money. The last government intervention was in 1980 when Chrysler was offered a loan of $1.2bn. The Senate is expected to pass the broad spending bill this week.

The bill's sponsors hope that President George W Bush will sign it off by 1 October, when the government begins its new financial year. Industry lobbyists wanted the loan, bundled with the wider budget bill, put before lawmakers before they switch their attention to November's elections.

Falling sales, rising production costs and a steep rise in the cost of borrowing have made life tough for America's car giants. They have also fallen behind their Asian rivals in producing smaller, cleaner vehicles, as consumers shun gas-guzzlers because of the soaring cost of fuel.

Critics of the bill said the financing would amount to state aid to prop up a struggling industry. The carmakers themselves have said that while they could survive without the loan, tens of thousands of jobs could be lost. "These loans amounts to a little more than 1% of the real bail-out - the one that the Bush administration wants for Wall Street at a cost of $700bn," said Republican John Dingell.