The Big 3 are disappearing right now because they can't receive credit, and consequently can't roll over their debts. Exacerbating this, demand for cars - even

The Big 3 are disappearing right now because they can't receive credit, and consequently can't roll over their debts. Exacerbating this, demand for cars - even for Japanese cars - has plummeted as consumers are scared and are pulling back on all purchases, to say nothing of having difficulty securing auto loans. This in turn makes it even harder for the Big 3 to secure already difficult to receive credit. The proximate cause of this potential bankruptcy is the credit crisis. If the Big 3 disappear because of the credit crisis, and suppliers go bankrupt as well, experts estimate that could mean the loss of 3 million jobs. Suppose you worked for a fairly well run auto supplier, and suddenly you don't have a job. Instead of considering buying a car - or any major good or service - you wouldn't be able to. If you worked in an industry either directly or tangentially related to autos - say auto dealers, gas stations, hotels, steel - you'd likely start to fear losing your job. Just the fear of losing your job would change your consumption habits. Fear becomes a self fulfilling prophesy, creating even lower demand, necessitating even more job cuts, lower prices, and even less demand. A Big 3 bankruptcy would lower aggregate demand, and have potentially massive consequences through the rest of the economy. An event can both be the result of supply/demand, and create new supply/demand - financial markets and the economy are a chaotic system. That's why it's so hard to predict exactly what the consequences of a Big 3 failure would be.