One day last week on my drive into work, the talk radio guys were interviewing someone who had taken a full page ad in USA Today to advertise his solution to mortgage defaults. (see http://remortgageamerica.blogspot.com/) His post seems to make sense, if in fact Washington is really interested in directly helping "Main Street".
Along these same lines, it might be interesting to position all of the current and up-coming bail-out money toward individuals who will then deliver business or relief to the industries in crisis. For example, Ford, GM, and Chrysler are clearly on the verge of bankruptcy. Without debating pros and cons, let's assume it’s a good idea to provide assistance.
Instead of allocating $15B now and probably $100B over the next 2 years to the failing U.S. auto manufacturers…and having 38% ($18B) allocated off to overhead*, why not subsidize $10,000 of any vehicle purchase from the ‘Big 3’ for the first 5M U.S. taxpayers who sign up. The program could provide more incentive for hybrids and might also have different levels of subsidy based on income.
In any case, the price tag would be $50B. It would directly benefit individuals. For Ford, GM, and Chrysler it would generate new car sales and create 5M new customers, which should be much more valuable than a loan package.
Rick Huebner is President & CEO of VISTECH.com, a technology company based in Hartford, CT.
*I attended an interesting discussion on Afghanistan recently. The speaker had spent 5 years working with the Afghan people to assist with building educational programs. He noted that 38% of all U.S. money allocated to Afghanistan never leaves the U.S. So from here on out, I’m going to assume 38% of all U.S. aid is absorbed into bureaucracy and overhead…sounds reasonable.
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