Bailing out the car industry

Much has been made about the "Big 3" auto makers and how they may not be able to remain in business. What does that do to our country if they go down?

A friend of mine had an idea. (Thanks Steve T.) He thought that a bail-out of the car companies should progress as follows. Every family in the United States could be given $20,000 of credit to be used to purchase a new car. They could purchase the car from any company they wanted to. Money would flow through the economy, car companies could open production lines again which would be good for the employment numbers. It would become apparent which cars are most desired and emissions would be cleaner, which would be a move toward a "greener" America.

The market that would suffer under this plan may be the used car market, "why buy used when buying new will do"? 

One major difference between the auto manufacturers and the used car businesses is that if they were to go to Washington to ask for bail-out money themselves, they would not be flying in on their own corporate jets.