I did not mean to imply all older cars were gas guzzlers, I specifically meant I would be happy if something was done to replace 100,000 gas guzzlers with gas efficient vehicles. But that was an unimportant aside anyway.
That might be possible. There is evidence, for example, that if an employer automatically puts part of your cheque in a savings account, you’ll be less likely to take it out and spend it than you would be to save an equivalent amount of money if you were just given a cheque for the full amount. Richard Thaler and Cass Sunstein make this case in Nudge Economics. This book and its ideas are quite influential in Obama’s circle of advisors, which I take as a positive sign. Cass Sunstein you may recognize - He has been appointed by Obama to be the head of the White House Office of Information and Regulatory Affairs (OIRA) - a position in which I expect he’ll try to implement some of these ideas.
smiling bandit, What Exit?, and everyone else. Knock off the personal attacks.
I don’t care how unrealistic the proposal in the OP may be, if you have to attack the author, take it to the Pit.
And to everyone who is attacking the “idea”: OK. We get it. The proposal is generally considered foolish. Save those comments for the Pit lest you overstep the Forum rules in your haste to pile on.
[ /Moderating ]
Fair enough: I would define an American made car as one which had a body made in the continental USA, and with a parts content of 80% (value) mae in the USA.
My reasoning was:
-you get rid of older, polluting cars
-you keep the scrap yards busy
-you put money into manufacturers, who will use it to hire people
Giving money to firms like AIG and BOA will just be used to pay off crdit obligations to other banks, many of them foreign.
Few cars can boast an 80% parts content made in the USA, so the manufacturers are now going to have to redesign their cars. It’s also a violation of NAFTA to have a government program that punishes GM, Ford et al. for making cars in Canada.
You also haven’t quite explained what happens to families who can’t afford a new car, even with a voucher.
Or explained why those of us who are driving 10 year old cars that get great gas mileage and pass all smog checks (in California!) should have to go into debt to get new vehicles that aren’t as good as the ones we drive now.
The problem with all these things is that the ones who really come out ahead are the accountants. The first thing is that you will need some kind of governmental list of approved cars which are certified to have 80 % value made in the USA. This is a nightmare. You need to establish rules upon rules, trace every item back to its origin. Since you can’t really do that it turns out that items which were foreign can now be domestic by just assembling them in the US or even by just buying them from a reseller rather than importing them. Suppose you were buying nuts and bolts in China. Well, now you buy them in America. Are you going to require certificates of origin of every nut and bolt? some batches may come from here, some from there. It would be a nightmare. What you need to change is the way things are accounted for.
Not only that. Accountants are masters at working the numbers. How do you account for origin of content. Suppose Nissota USA is a subsidiary of Nissota Japan. Nissota USA was buying motors from Nissota Japan for $3000 but now it makes more sense that the motors are officially priced at $1500 and another $1500 stay in Nissota USA or be transferred to Japan as another concept like profit, management fees or whatever.
Now my car is going to have an American-made taillight valued at $2000 and a Japanese made motor valued at $500. Do you really think you can control every single accounting operation? They do not have to do anything illegal. Only have a good accountant who knows how to use the rules in their favor.
The point is that it is futile to try to push water uphill because it will find its way downhill. All yopu will achieve is create a wasteful government bureaucracy designed to enforce the program and waste the time of the accountants who will find the way to get around the government’s obstacles.
The problem with these hare-brained ideas is that politicians in DC are full of them and just do not learn that they ususally backfire and when they do not backfire outright they provide a small benefit now at a huge cost later.
I remember the “luxury tax” on boats. The government thought they would collect a lot of money but what happened is a lot of boat builders were driven out of business. By the time it was repealed it was too late for many. That tax was a boon for boat manufacturers in China and other countries.
Similarly the tax on fuel used for “recreational boating” and not for working boats. Marinas needed to invest in duplicating the number of pumps but many could not afford it and just decided to sell one type of fuel or the other. Some boaters now had to go miles and miles to get fuel. How do you define “recreational”? Lots of paperwork now had to be done to justify this and that. The public hated it. Marinas hated it. Finally, after much complaining it was repealed.
As I say, hare-brained schemes are very common in DC.
Since 1987, all new vehicles sold in the USA must carry a statement of origin and parts content.
So busy that they’ll most likely start charging a hefty sum to help you get rid of the car you’re obliged to scrap. Not only will there be insufficient supply at the new-car end of this system, but there’s going to be a big glut here, too.
As I said. Good work for accountants, lawyers and bureaucrats. They find the ways.
Unless your local constabulary is headed by Ralph124c, I imagine your car only has to meet the looser emissions standards from 10 years ago.
Forcing your 10 year old car to meet current emmissions standards would be highly unfair, and would sort of be like mandatory scrapping of 10 year old cars, wouldn’t it?
Wait, I’ve got a better idea. Get little boys to run around America throwing rocks through our windows. The people with busted windows get new windows, the windowmakers get rich, and we can pay the kids too. Win-win-win!
Even if this worked, it’d be very lopsided. OK, the American car companies need some help. But the American coal mines need help, too, and the American toy factories, and the American construction workers, and all of the other American companies as well. If you figure out just exactly how much help the car companies need, and give it to them, will that also give the right amount of help to all those other companies? Almost certainly not.
I think people would just spend this at the grocery store. Wouldn’t you? Or for goods which you were going to buy anyway?
Ya just can’t make people spend money on things they don’t want or need, especially when economic times are tough.
To the OP: what happens to all the people who live in NYC or Chicago who don’t need a car, don’t have a place to park a car, and can’t afford to pay to have one garaged?
The best way of getting out of a hole is not to get into it in the first place but I suppose it’s a bit late for that now.
Now the issue is to do no more harm and I do not have much confidence in that. The government has to be seen as doing something and public perception will be more favorable if they do something, even if harmful, than if they do nothing and let the flu run its course.
A couple of coworkers and I were kicking around similar ideas when the auto companies were in DC begging to be saved…
we decided that Congress should tell them to retool their plants, and produce alt. energy vehicles immediately. To get the money to do this, they need to sell off their ever increasing inventory. To spur sales, every household would receive a $10,000 voucher good towards the purchase of any car built by one of the US Automakers. These vouchers could be transferred and stacked. You could also simply pay off your existing car loan(any mfg), since the debt is probably held by an American bank. You want to sell your 2005 Accord? I’ll give you my govt voucher for it and you can go put down $20,000 on a new CTS. Is it much of a stretch to think that every vehicle sitting on dealer’s lots would be sold, and every car that could be produced until the companies had retooled their production lines would be sold. People who use the voucher to pay off an existing car can use the money freed up every month to help get caught up on their mortgage, or start making the purchases that no one is making right now to help spur the economy (TVs, furniture, etc).
The gov’t would also provide tax incetives and loans to gas stations to convert to the new energy source (whatever it is we decide on), the gov’t would build nuclear power plants, and begin infrastructure improvements and maintenance that is also needed on roads, bridges, etc to help generate jobs in the failing construction sector.
The sum goal is to make us energy independent within 20 years, allow the US auto industry to completely retool, and provide enough jobs and money for research and the conversion to get us out of this recession. Taxing the new fuel sources so that they are comparable to what we would have been paying for gasoline would then pay back the govt, with those taxes to eventually taper until they fall off and the whole shebang is paid for.
I have an 75 convertible Eldorado. You will have to pry it from my cold, dead hands. But other than the scrapping of old cars, I like your ideas and I would like to subscribe to your new pro-union newsletter.
Are you saying that the gov’t should help me purchase a vehicle which, in 20 years, will be obsolete? Do I then have to purchase one of the alternative fuel ones?
Your scenario is not going to be appealing to people who have no need for a car. What about those folks?
Is it much of a stretch to think that I (and probably many others) would prefer the 2005 Accord to the new CTS?
Also, let’s suppose that every vehicle on the dealer’s lots does get sold, and the automakers completely retool their plants. Now we’ve got millions of Americans with very new cars, and thus a much reduced incentive to buy these newer cars made in the retooled plants. There would be a temporary spike in demand for cars as people used these vouchers to buy ones sitting on the lot, but then there would be a drastic drop-off afterward, and then we’d have these re-tooled cars sitting on the lots.
I have a Lincoln Town Car that is 8 years old. It has 64,000 miles on it and runs beautifully. I do not want to give it up. It will do well for years to come.
Who is using more resources, a person driving 50 thousand miles a year in a small car or one driving low miles in a poorer mileage car? I understand ,I could get better mileage. But I am in the area of 20MPG. The difference is not that big.