Yes I think the auto industry is too big for the government to let it fail and this was shown after it was bailed out by the government. Without the bailout, thousands of jobs would have been lost, contributing to even high numbers of employed people. It would have negatively affected our economy too. Here in Ohio, the bailout helped saved many jobs, including 2 family members jobs. I am glad the government bailed out the auto makers and I think it helped.
"Too big to fail" is a colloquial term in describing certain financial institutions that are so large and so interconnected that their failure is widely held to be disastrous to the economy, and which therefore must be supported by government when they face difficulty.Proponents of this theory believe that the importance of some institutions means they should become recipients of beneficial financial and economic policies from governments or central banks.One of the problems that arises is moral hazard whereby a company that benefits from these protective policies will seek to profit by it, and take positions that are high-risk high-return, as they are able to leverage these risks based on the policy preference they receive.
Industries that are "too big to fail" are a disaster when it comes to the economy, but the time to address them is not when they are on the precipice of failing. At that point, it's too late-- the simple fact that they are too big to fail has to be accepted, and we have to do what we can to keep it from dragging down society. However, after the industry is propped up again, it's time to sort out why it's "too big to fail" and try to ensure that a healthy, competitive economy can flourish again. Unfortunately, lobbyists will probably prevent that from being done.
If the auto industry is incapable of selling cars as cheap and efficiently as it's international competitors, it will inevitably fail. This is the life of a company in the free market. Subsidizing it will only delay what will eventually happen. Any business, regardless of size, is susceptible to failure.
The United States should support a free market economy as much as possible. The auto industry is no different. The Big Three automakers should have gone into structured bankruptcy instead of taking huge handouts from taxpayers when no one could afford to buy cars. It isn't the taxpayers' fault certain brands weren't competitive with imports.