The argument for and against is argued well by two senior professors and co-bloggers on the Becker-Posner Blog. Becker (economist and professor) argues against providing a bailout and Posner (judge and senior lecturer in law) argues for it, at least for now.  

I tend to agree with Posner and those who argue that during a recession and great economic volatility, the big three automakers should not be allowed to fall. The ripple effect of a bankruptcy and restructuring can be overcome but only during stable economic times, not now. United States isn’t even over the problems of the sub-prime mortgage crisis and the credit crunch that followed. If this industry falls, the economic doomsday scenarios have already been well publicized, reaching over 2.5 million people in its initial stages. Not to mention the unimaginable struggles this would cause to working families. No, that cannot be permitted to happen.

The government needs to buy the big three enough time to ride out this recession. How they do it, is still open for debate. Certainly, it should be some form of a loan with a plan for how the government will get back the tax payers money. The opportunity is certainly there for attaching conditions to expedite Obama’s agenda for reducing fossil fuel consumption.