Even if GM made good cars, the legacy costs would kill the company. When GM made the pension deal in 1962, it had 464,000 US employees, and was paying benefits to 40,000 retirees and their spouses.

So for every retiree, there were about 11 workers on the factory floor. Then they started automating, replacing people with machines. By 2007, the workforce had shrunk to 141,000 - but the company was now paying benefits to 450,000 retirees.

The math doesn’t work. And chucking $25 billion at the Big 3 isn’t going to make it work.

There are only 2 solutions that will work:

One, let the free market do its thing. Reward excellence. Kill the weak. Say goodbye to the Big 3. New US auto companies will emerge, and they will learn from the Big 3’s mistakes and make better cars at higher profits.

Two, execute a managed bankruptcy that will require the automakers to renegotiate their contracts with -- and yes, break their promises to -- the unionized retirees.

Neither of these solutions is pleasant. In fact, both are extremely painful. But the hurt is there anyway. Half a million Americans lost their jobs in November. I know what it’s like to pound the pavement looking for work, worried about my family, my house, my future. Those are long days - but sometimes they’re necessary.

The most important thing is to stay firmly rooted in reality. And the reality is that Toyota (TM) makes better cars than GM. And they aren’t paying billions of dollars to ex-employees.

Another reality is that the system is self-correcting. The US job market is currently flooded with educated, motivated, trained workers. That’s a very good environment for entrepreneurs to start new businesses in.

I believe in democracy. I believe in unions. But I do not believe that GM, Ford or Chrysler can survive in their current form. The bailout is merely a temporary painkiller. It will wear off, and the disease will remain. Better to spend the $25 billion on hiring more elementary school teachers, or building a new electrical grid. That will be better for the economy in the long run.