This week I was again struck by the irony: the US Feds – who have no money and are deeply in debt — are going to borrow still more money from China to bail out the Greeks – who are deeply in debt. That’s nuts.
And, the few remaining US taxpayers are going to asked (make that ‘told’) that they (and the Chinese lenders) subsidize their neighbors new green rides.
And incumbents wonder why voters are dispatching them one after another …
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Excerpted from WSJ: Welfare Wagons The new electric cars are powered by taxpayer credits, May 12, 2010
Congratulations. You’re about to buy a fancy new Nissan Leaf or Chevy Volt . . . for someone else.
The all electric Nissan Leaf is a car for a wealthy hobbyist — good for a trip of 100 miles after which it becomes an inert lump at the end of your driveway (or behind a tow truck) for the many hours it will take to recharge.
The Leaf will roll out in December with a surprisingly modest price of $25,280. That’s after a $7,500 federal tax credit is counted.
Buyers will also have to spring for a $2,200 charging station, but another tax credit ($1,100) cuts the cost in half.
Some states – e.g. bankrupt California, Georgia and Tennessee — will chip in additional consumer tax credits as high as $5,000.
- Note: total tax credits = $13,600
By pricing low and going for volume, Nissan is making a calculated grab for the lion’s share of the available tax dollars — and also pressuring Washington to extend the program when the money runs out.
iPad lust applies to cars too, and early adopters can be expected to line up around the block.
But it is insane to subsidize these vehicles with taxpayer dollars.
Tax handouts for electric vehicles are emblematic of an alarmingly childish refusal to take account that the U.S. government is deeply in debt. Running up more debt to subsidize electric runabouts for suburbanites is not such a sign.
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Even if you believe saving gasoline is a holy cause, subsidizing electric cars simply is not a substitute for politicians finding the courage to jack up gas prices.
Think about it this way:
- You can double the fuel efficiency of any car by putting a second person in it.
- You can increase its fuel efficiency to infinity by refraining from frivolous trips.
These are the incentives that flow from a higher gas price.
Exactly the opposite incentives flow from mandatory investment in higher-mileage vehicles. If you paid a lot for a car that costs very little to operate, why not operate it? Why bother to car pool? Why not drive across town for a jar of mayonnaise?
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Full article:
http://online.wsj.com/article/SB10001424052748703880304575236692175987752.html?mod=djemEditorialPage_h
The Homa Files 