In these tough economic times, Detroit automakers have been pounding the pavement this week in search of a new bailout. Their weapon of choice has been federally-backed loan guarantees. These guarantees enable banks to loan money at cheaper rates than they would normally offer because taxpayers take on the risks that bankers have decided are too great for private lenders to bear.

Last year, General Motors, Ford, and Chrysler got a $25 billion loan guarantee program approved. This was supposedly to help Detroit retool and get out from under their Hummer-sized problems (of their own making) and start building more efficient vehicles. But Congress didn’t provide the federal appropriation to get the program moving.

Detroit automakers are now apparently trying to loosen the program’s requirements (which some argue are already too weak) and even double the amount of loans the taxpayer is backing. It’s a pretty sweet deal: car manufacturers wouldn’t have to repay principal or interest for five years.

In part because of the five year deferment on payments and the automakers’ deteriorating credit rating, the Congressional Budget Office (CBO) estimates that taxpayers will have subsidized the $25 billion worth of loans to the tune of $7.5 billion.

This is just the latest loan guarantee program to be considered. Beyond the Big Three, the nuclear power, domestic shipbuilding and railroad industries have succeeded in getting government-backed loans. The Department of Energy is in the process of embarking on a loan guarantee program to distribute nearly $40 billion in guarantees for risky energy projects, $18.5 billion of which is for nuclear reactors that after decades of subsidies still cannot receive private financing from Wall Street. The CBO has assessed the likelihood of defaults on loans for nuclear loan guarantees to be well above 50%.

So taxpayers already have a portfolio full of risky investments even before the car makers program goes forward.

If we’ve learned anything in the last few weeks, it is that Wall Street investors have been willing – perhaps too willing – to take risks. So when Wall Street says loans are too risky, Congress should take heed. Boosting the automakers bottom line may make good political sense with Michigan a battleground state, but it doesn’t make sense for taxpayers who risk being stuck with yet more debt.