Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Also, the used cars must be DESTROYED. Wealth is created through production, not destruction. When used cars are destroyed, prices go up. That hurts the poor the most. Good job, Obama!
Have faith, the Big O is going recycle all the steel to make tanks and drive into the city of Beijing and tell the Chinese that we aren't paying off the debt we owe them. He's going to create thousands of jobs tearing down the cars for recycling and shipping the steel off to foreign countries!!
I agree and disagree with these posts. For starters, I did not vote for his highness, nor would I likely vote for any Democrat.
BUT, the program is intended to help the economic woes that are besetting the US Auto Industry. If the choices are to:
A: Let 'em FAIL! Great, but there are a lot of people who make their living from the Auto Industry, and not just those who work for one of the big three. Supplies, truck drivers who move the parts, warehouse people, sales people, etc. Big part of the economy.
B: Give the big three some money. Short term, might do somethign, but I am no fan of corporate welfare.
C: Incentivise spending by subsidizing purchases. Seems like the least of the three evils. Sure, you and I are contributing $4500 to the purchase of this car, but that car being sold has a larger impact on the economy than $4500, IMHO. The sales guy makes some extra money, the dealer makes money, manufacturer, suppliers, warehouse guys, truck drivers, etc, all make a little more money. That money goes back into the economy in the way of more purchases. Even a small thing, like the Truck driver takes his wife out ot eat this week instead of eating at home has an impact.
Face it, like it or not, we are a consumer driven economy. We MUST buy stuff and pay for services for the economy to recover. If everyoen took their money, and hoarded it, waiting for the economy to recover, it never would. Spending drives our economic success, not hoarding. Of course we all should save for the future, and not be frivolous, but unless you have the carpenter work on your house, he does not have the money for the mechanic to fix his car, who doesn't have the money to go out to eat, so the waiter doesn't make the tip, and he can't take his girlfriend to the movie, etc......
GM and Chrysler we did not let fail. Being in bankruptcy court for what, 1 hour it seemed like did not fix the problem. Watch - in another year or so both companies will be in trouble..again. Obama rushed them in and out.
All these purchases of new cars right now will stop. and fast.. Dealers will be hurting again. Only reason people are spending is because of the $4500 deduction.
You see how well last years Stimulus check worked out, right? It did nothing..
Option A. Let them fail is the only way to fix things. Those people involved in that industry will have to find other work..oh well. life goes on.
I agree and disagree with these posts. For starters, I did not vote for his highness, nor would I likely vote for any Democrat.
So you're are partisan hack then? Wouldn't vote for someone no matter how good they were if they happened to wear a democrat label?
Quote:
BUT, the program is intended to help the economic woes that are besetting the US Auto Industry. If the choices are to:
A: Let 'em FAIL! Great, but there are a lot of people who make their living from the Auto Industry, and not just those who work for one of the big three. Supplies, truck drivers who move the parts, warehouse people, sales people, etc. Big part of the economy.
B: Give the big three some money. Short term, might do somethign, but I am no fan of corporate welfare.
C: Incentivise spending by subsidizing purchases. Seems like the least of the three evils. Sure, you and I are contributing $4500 to the purchase of this car, but that car being sold has a larger impact on the economy than $4500, IMHO. The sales guy makes some extra money, the dealer makes money, manufacturer, suppliers, warehouse guys, truck drivers, etc, all make a little more money. That money goes back into the economy in the way of more purchases. Even a small thing, like the Truck driver takes his wife out ot eat this week instead of eating at home has an impact.
Option A, obviously. The other two will cripple the American Economy for decades to come.
Quote:
Face it, like it or not, we are a consumer driven economy. We MUST buy stuff and pay for services for the economy to recover. If everyoen took their money, and hoarded it, waiting for the economy to recover, it never would. Spending drives our economic success, not hoarding. Of course we all should save for the future, and not be frivolous, but unless you have the carpenter work on your house, he does not have the money for the mechanic to fix his car, who doesn't have the money to go out to eat, so the waiter doesn't make the tip, and he can't take his girlfriend to the movie, etc......
If everyone took their money and hoarded it, there would be a savings boom in the US. If the government would get out of the damn way and not gobble it all up with its borrowings then that would result in a production bonanza due to the resulting investment.
For the short term that consumption lags production (which it is going to have to do for a long long time in fact, since all that interest on foreign debt needs to be paid) you export stuff to other places.
It's simple economics. Production drives an economy. If consumption does then you will always have a debt fueled consumption bubble which will burst at some point.
People need to get out of the auto industry then. We keep bandaid-ing the problem trying to support them. What happensed to the people who manufacture and build stuff for our nations defense? Lots of them got laid off in the early 90s and had to adapt. No govt handout to them.
I agree and disagree with these posts. For starters, I did not vote for his highness, nor would I likely vote for any Democrat
Funny, I vastly preferred Obama to McCain and I'm dead set against this. It's a sign of the times when even die-hard republicans turn to socialism.
Quote:
BUT, the program is intended to help the economic woes that are besetting the US Auto Industry. If the choices are to:
That's the first place where they went wrong. Why does the auto industry deserve special treatment ?
Usually, cases for government intervention are appropriate where externalities resulting from voluntary transactions affect third parties (examples include inventions that everyone benefits from, and pollution).
But this argument doesn't apply very well to cars. As was pointed out in a column, automobiles are exclusible (I can stop you from using my car) and don't have positive externalities (you don't benefit from me driving a car.
Helping the auto industry in particular is a giveaway to a special interest. Helping the economy in aggregate should take precedence.
Quote:
A: Let 'em FAIL! Great, but there are a lot of people who make their living from the Auto Industry, and not just those who work for one of the big three. Supplies, truck drivers who move the parts, warehouse people, sales people, etc. Big part of the economy.
B: Give the big three some money. Short term, might do somethign, but I am no fan of corporate welfare.
C: Incentivise spending by subsidizing purchases. Seems like the least of the three evils. Sure, you and I are contributing $4500 to the purchase of this car, but that car being sold has a larger impact on the economy than $4500, IMHO. The sales guy makes some extra money, the dealer makes money, manufacturer, suppliers, warehouse guys, truck drivers, etc, all make a little more money. That money goes back into the economy in the way of more purchases. Even a small thing, like the Truck driver takes his wife out ot eat this week instead of eating at home has an impact.
This is a false choice. You won't get the entire car industry "failing". Instead, it will adjust capacity so that it produces cars in quantities which people want. One of the classic problems with centrally planned economies, is that good are produced in the quantities that the special interest want to produce them, instead of the quantity which maximizes utility. The end result is surpluses of useless things that no-one wants, and shortages of useful things.
If they try to stimulate production of things that are in limited demand through destruction of property, the obvious effect is less aggregate wealth, due to destruction of property.
Quote:
Face it, like it or not, we are a consumer driven economy. We MUST buy stuff and pay for services for the economy to recover.
The idea of stimulus should be that people spend more money on useful things, not things that the special interests want you to buy.
According to what I've read 1 Billion has been paid out, they are putting 2 billion more into the program. The average tax break is 3500.00. So are there 3 million new cars on the road or does my brain not compute those large numbers?
I agree and disagree with these posts. For starters, I did not vote for his highness, nor would I likely vote for any Democrat.
BUT, the program is intended to help the economic woes that are besetting the US Auto Industry. If the choices are to:
A: Let 'em FAIL! Great, but there are a lot of people who make their living from the Auto Industry, and not just those who work for one of the big three. Supplies, truck drivers who move the parts, warehouse people, sales people, etc. Big part of the economy.
B: Give the big three some money. Short term, might do somethign, but I am no fan of corporate welfare.
C: Incentivise spending by subsidizing purchases. Seems like the least of the three evils. Sure, you and I are contributing $4500 to the purchase of this car, but that car being sold has a larger impact on the economy than $4500, IMHO. The sales guy makes some extra money, the dealer makes money, manufacturer, suppliers, warehouse guys, truck drivers, etc, all make a little more money. That money goes back into the economy in the way of more purchases. Even a small thing, like the Truck driver takes his wife out ot eat this week instead of eating at home has an impact.
Face it, like it or not, we are a consumer driven economy. We MUST buy stuff and pay for services for the economy to recover. If everyoen took their money, and hoarded it, waiting for the economy to recover, it never would. Spending drives our economic success, not hoarding. Of course we all should save for the future, and not be frivolous, but unless you have the carpenter work on your house, he does not have the money for the mechanic to fix his car, who doesn't have the money to go out to eat, so the waiter doesn't make the tip, and he can't take his girlfriend to the movie, etc......
This is a flawed argument. You neglect the fact that consumption of cars was artificially stimulated the entire decade and the industry expanded to meet demand which was artificially manufactured. It is entirely possible that we have way too many car dealerships in America, and any further stimulation of artificial demand will only lead to a bigger crash in the future once that artificial demand is removed. Dealers are likely to misread this as strength in the market and expand their operations rather than contract. When the demand dries up, it's a big crash.
The American economy should be shifting towards producing cars at competitive prices so that we can sell them to Americans and foreigners at an affordable price. Allowing a real bankruptcy would have easily accomplished this because the liabilities would have been eliminated in the auto sector. If you truly want to strengthen the industrial manufacturing base as it stands, you should be removing the income tax for all workers in the auto manufacturing industry. It would make it easier for employers to hire workers and produce cars at rates competitive to the rest of the world. The tax revenue we collect from manufacturing is minimal, and there is no reason we should be strangling the industries that can lead us to recovery.
Stimulating your industrial base through artificial demand prevents the industrial base from ever becoming self sufficient. At this point in time, the average American shouldn't be taking on more debt. Paying people to get rid of their vehicles that are fully paid for to take on more debt is crazy at this point in time. Furthermore, destroying perfectly functioning engines is completely insane. Why don't you bulldoze a few houses and tear down a couple of skyscrapers while you're at it. These types of actions are detrimental to the real economy and you only look at who it benefits rather than who it hurts. It hurts the taxpayers. It hurts the people that would look to buy a car in the used car market.
Btw, we are funding this through T-bills which are mostly being purchased by the bank of Japan. Given that people seem to be using the CARS program for Toyota Corolla's, we are essentially borrowing money from Japan to buy things from Japan. This does not help Americans in the long run.
C: Incentivise spending by subsidizing purchases. Seems like the least of the three evils.
actually, it seems like the kind of attitude that caused this economic mess in the first place. people spending irresponsibly hurts our economy, it doesnt help us. yeah, we got a short term boost but then we got a quick fall.
so now who is going to bail out the people who got rid of their clunkers and financed cars by using the $4,500 as a down payment?
Government should have stayed out of it. The markets have a life of their own and I believe they would have stabilized if allowed to work it out. Those that then failed should be allowed to fail.
What about the people that can only afford those "clunkers"? What about the parts business? What about the dealerships that have been closed?
Frankly, I don't believe that the issues are really "saving the economy" or "reforming healthcare" rather, a matter of power and control.
It's a mentality - people that are on welfare tend to defend welfare. The left knows this and wants to increase the number of people beholden to government and, as a result, less apt to
want change. Even if they wanted to they would be financially unable to break away from the grip of government.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
