Hoosiers without a direct connection to Chrysler have been hurt by the federal government's mishandling of the automaker's restructuring. When Obama administration bureaucrats sought to use the bankruptcy process to eliminate the rightful claims of holders of secured debt, they weakened the Indiana police and teacher pension trust funds, along with the Indiana highway construction trust fund, that hold secured Chrysler bonds.

If an investor or a trust fund, such as the three Indiana trust funds in this case, buys a secured bond they accept a lower rate of return in exchange for the certainty of knowing that if the entity issuing the bond goes bankrupt, a court will require the issuer to sell assets to pay back the debt. Secured debt has traditionally been a safer investment that shields the investing entity from the uncertainty that other investment vehicles carry.

The negative impact of Chrysler's bankruptcy process on Indiana came when the Obama administration declared that Chrysler's secured debt was no longer secured. Instead of following decades of bankruptcy law precedent and holding Chrysler accountable, the federal government unilaterally and arbitrarily declared that secured debt is not really secured debt. This decision cost the Indiana trust funds $5 million.

With the subsequent bankruptcy of General Motors, the federal government might rewrite that company's obligations and hurt thousands of average Americans who, in one way or another, relied on secured GM bonds.

If the federal government had allowed the bankruptcy process to unfold as it should have, the restructuring of Chrysler may not have cost Indiana $5 million. The bonds held by the trust funds would have been paid back in some way and the money would not have been lost to irresponsible mandates.

Indiana State Treasurer Richard Mourdock has used his authority as manager of these three state trust funds to file motions against the Chrysler restructuring until the matter can be resolved. He is properly arguing that Indiana should not be required to lose millions of dollars simply because the federal government wishes to unilaterally rewrite a contractual agreement.

The price Indiana is paying for the federal government's intervention in the marketplace is a resounding commentary on the dangers of a policy that places the government ahead of individuals as the key players in an economy.

Chrysler and General Motors can emerge from this frustrating period of time as better automakers if they are required to keep their obligations to secured creditors.

Brian Sikma of Wanatah has been involved in various aspects of Indiana public policy and politics. He may be reached at brian@foundation5strategies.com. The opinion expressed in this column is the writer's and not necessarily that of The Times.