Maybe the government isn’t worried so much about the automakers as much as they are worried about the bondholders who stand to lose everything?

General Motors is likely to file for bankruptcy protection with government backing, giving bondholders a recovery of more than 25 cents on the dollar, according to Moody’s Investors Service.

There is a 70 percent probability that the restructuring plan for U.S. automakers will consist of a prepackaged bankruptcy financed by government loans to get GM and Chrysler through to 2009, Moody’s said in a report dated Dec. 15. Under that scenario, bondholders would be likely to lose less than 75 percent of their investment, Moody’s said.

I still don’t see why the American taxpayer should be burdened with any of this, isn’t there too much water in the bucket already?

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