It looks like the folks in DC are hell-bent to give the stimulus package another try seeing as the first one didn’t have any real effect.

At the same time, the Democrats owe too much to the unions not to save the auto industry.

Let’s combine the two, give the economy a boost and save over a million jobs all at once.

Consider the following:

Manufacturing costs of motor vehicles are 65% labor (i.e.: W-2 income), that’s not all direct but due to suppliers. GM alone has over 1300 suppliers. (That’s a lot of jobs!)

1 in 10 Americans makes all or part of their income due to the automobile industry.

Money turns over 5 times in a year.

Thus a vehicle with a manufacturing cost of 20K produces 13,500 in W-2 income which in turn becomes a total of 65K in 12 months due to the 5 turnovers.
(This isn’t magic, it’s simply how the economy works.)

Our domestic car makers are saddled with legacy costs, most of which will reduce dramatically in 2010 due to contract changes.

They need to survive to get there.

This whole mess is not solely due to the unions

It would be easy to simply blame the unions; and it’s certainly not my job to defend them; however as it regards the current mess in Detroit, the facts get in the way.

The UAW has already made massive concessions some of which are already being implemented and others are timed to roll in over the next year or so.

Our own over-zealous government with an alphabet soup of regulatory agencies has been no help either.

Foreign competitors have worked off-shore collectively to meet various US gov’t. imposed emission and safety standards, thus dramatically reducing those R&D costs.
American car companies are prohibited from that by our FTC.

Make no mistake; it’s no surprise that once again government has been a major part of the problem.

Here’s the solution.

Instead of either shipping cases of cash off to car makers; or sending us all another check:

Send out a voucher for say $1,000 good on a motor vehicle for the percentage of the vehicle that’s domestic. (Civic = 70% Ford Explorer=80%)

Let those not interested in a new car sell or give away their vouchers (Ebay would be loaded with them in no time flat) and those that are so inclined can use as many as they can get their hands on up to the full MSRP of the vehicle.

This would bail out the car industry without giving them a dime directly

Further it would reduce the overall age of the nation’s cars which would in turn;
increase overall fuel economy & decrease pollution.

Strengthen the dollar!

Since vehicles with a higher domestic content would be moving better this would reduce our imports, strengthening our dollar which would in turn further reduce what we pay for anything imported …like gas!

Jobs

Instead of simply bailing out a few big companies, this would cause such a run that it would create employment throughout the industry affecting over 1300 suppliers and their workers.

That would give the economy good swift kick right where it needs one!

Pays for itself!

Since money turns over 5 times, and the vouchers are only good for the domestic content of the vehicle, every dime would be spent in the United States creating taxable income.
What is the income tax on 65,000 anyway?

(Remember? 20K manufacturing cost = $13,500 W-2 income x 5 = $65,000)

Another Stimulus Package?

I’m sure you’ll agree that this makes more sense than simply sending out checks; many of which will be used to buy new flat screen TV’s usually made in Malaysia or some such place.

However, Paulson is an idjit if he can’t read the name Troubled Assets Relief Program when he says TARP isn’t intended for buying up ‘troubled assets’. It was meant originally to buy up toxic assets and then helping financial firms to keep the money flowing was added. TARP is for both.

Now he says they have pretty well stabilized financial firms and they’re guaranteeing loans & stuff, so it’s clearly time to work on mortgage workouts. Paulson says there isn’t enough money for buying them up, but he is ignoring the FDIC workout program where much less money is required.

Didn’t you hear? The Revolution was canceled…

Oh man, I just heard it was gonna start in a thread downstairs about 5 minutes ago. Now it’s already canceled? What’s the fun in that? Do I have to return the pitchfork?

I’m wondering about the political consequences. Does the GOP think they can own killing US automobiles now and crawl out from under in two years wtih promises of tax cuts? I hear and see them practically screaming DIE! DIE! DIE, worhtless US auto industry! for the last few days. Suppose one or more of the big three is liquidated. In two years, lots of unemployed, early involuntarily and incnoveniently retired auto workers are gong to want lower taxes on their non-existent union pay?

That doesn’t add up to me. Seems to me like the GOP has lost its mind. When will Michigan, Ohio and Indiana be swing states again? Or, am I missing something?

Sadly we do not as a people come to our brothers and sisters aid while they are in need – now they are coming for us.

The tech bubble was a bxtch slap to the genius workers, the housing bubble was collusion. People that have only been saving or living in the workforce for 10 or 12 years have nothing.

Boomers thought they were going to skate to the end and leave the bill – they will silly, they got smacked in the mouth as well. I have spoken to many that think as long as we keep bombing and even nuke people if needed as long as they can retire its all good – wow were they way off base.

Spit.