FEOS wrote:

How much would it cost the welfare system to pay those 2 million people their current salaries and benefits as well as contribute to the overall economy (taxes on revenues)?

The math simply doesn't work in your favor, Turq.
What makes you think that paying people welfare would involve the same level of income and benefits as they currently get working for GM?  Putting them on welfare would be far cheaper than subsidizing GM, Ford, or Chrysler.

You're also ignoring the fact that some of these people would find another job relatively quickly.

FEOS wrote:

Loan out $75B now and keep those 2 million jobs (and associated immediate and long-term tax revenue) and taxes on corporate income...or keep that $75B and lose those 2 million jobs (and related long-term tax revenue) and $175B in corporate tax revenue.

It's a hell of a lot easier to replace the management than it is to replace (or absorb the loss of) the company as a whole.
You're missing the point.  If you subsidize a company to keep it afloat, it has no incentive to change its ways.  There won't be much change in management, and the long term costs of loaning out this money will be much more expensive than letting the market clear itself.

In the short run, it is more painful to allow these companies to fall, but in the long run, it allows comparative advantage to work the way it should.

This is really weird, because I'm taking the conservative position while you're taking the liberal one.