Hey Obama, I don’t wanna buy my neighbor a new car
WASHINGTON (Reuters) – President Barack Obama and Democratic lawmakers reached agreement on Tuesday on a legislative proposal designed to stimulate U.S. auto sales, which have fallen to near 30-year lows.
The one-year plan crafted by members of the U.S. House of Representatives would offer vouchers worth up to $4,500 for owners to replace their less fuel efficient vehicles for models that get better gas mileage.
The goal of the “cash for clunkers” legislation is to sell 1 million vehicles.
“By stimulating consumer demand for new vehicles, this proposal will directly benefit domestic autoworkers and automotive manufacturers, which have arguably been hardest hit by the current economic downturn,” said Rep. John Dingell, a Michigan Democrat and staunch industry ally.</em>
First off, the auto industry in America is suffering because they don’t make products people want and they pay the people who make them too much money. And its certainly true that in leaner economic times people hold off trading in their car longer than usual, not willing to suffer a 50% loss of their assets value the instant they drive it off the lot.
But as has been proven time and time again, it is impossible to stimulate a single narrow section of an economy. Money used for vouchers is money that our government doesn’t have (btw, our government has never had its own money, it can’t, since it doesn’t produce anything. All it has is YOUR money), hence, it has to get it from me. So whatever amount I contribute at the point of a gun to buying my neighbor a new car is money I don’t get to spend as I please. Now, I bought a new car in 2005, and since it was a hybrid, I got a tax kickback. Now I suppose that makes me a hypocrite in taking the money, but I didn’t know about it when I got the car, only later. And the company I bought it from, Ford, isn’t standing hat in hand in Congress getting bailout money either.
The other problem with this scheme is that it most likely won’t have any effect at all on getting more people employed in the auto industry, since they are sitting on massive inventories of cars they can’t sell, and the cars purchased with this Ponzi scheme will only reduce a glut of product that already exists, in fact rewarding our auto industry for yet another bad decision, the production of cars they couldn’t sell. Somehow I don’t see this as helping the auto industry a bit. But nobody expects the government to actually do anything, do they?