Govt. Grinds Gears in Auto Industry Conundrum

"Where are we going to draw the line? We don't have all these blank checks to write out to every industry that's hurting because, certainly, everyone is hurting," Farzad said. "There's the issue of fairness."

Critics also wonder if the government should save companies that have made costly mistakes, such as depending on gas guzzlers and agreeing to bloated union contracts.

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"GM is paying really the overdue tab for decades of mismanagement and bad relations with labor," said Farzad.

Others disagree; Cole says it doesn't make sense to punish automakers.

"Regardless of who is to blame, forgetting about that, what's in the best interest of our economy?" Cole said. "What's going to cost less for you and me as taxpayers?"

American automakers argue that they too are victims of the credit crisis and desperately need a cash infusion to stop the bleeding.

"If we did not have a credit crisis today, this industry would not be in any way shape or form asking for this kind of financial support," said Cole.

Companies say that a bailout would offer short-term support until the arrival of their new, more fuel efficient fleet of cars, which are expected to be more popular.

"Capitalism is brutal and these shifts that happen once, twice every generation are never friendly," Farzad said. "Ultimately, the government has a decision to make; it's at a fork in the road."

With lingering questions, the government remains caught in a conundrum: The U.S. auto industry may be too big and important to fail, yet even a bailout does not guarantee success or quell concerned taxpayers' fears about where their money is going.