Interesting Bill - Auto Industry

[Aditya Chitral]

Here is an interesting article. I wonder how much boost this would give to the car companies.

Some gas guzzler owners can share their opinions

The "cash for clunkers" proposal, which would give consumers a tax credit of up to $4,500 for switching from their gas guzzlers, has been under consideration for months by lawmakers trying to strike a balance between giving an economic boost to struggling auto companies and promoting their environmental goals.

But environmentalists say the legislation is not tough enough and should require more serious reductions in greenhouse gas emissions. Under the House bill, introduced by Rep. Betty Sutton (D-Ohio), car owners would receive a $3,500 voucher for switching to a vehicle with just 4 miles per gallon better mileage — trading an old vehicle getting as much as 18 mpg for a new one with 22 mpg. If the mileage of the new car getsat least 10 more miles per gallon than the old one, the voucher would be worth $4,500.

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[woody]

I don't think any of this is necessary since I believe gas prices are going back to $4 sooner than people think, which caused 83 billion fewer miles to be driven in the first three quarters of 2008 in the US and compact car sales to shoot up.

And for the gov to give someone $3500 just because their car gets 4mpg more? Sounds pretty weak. save the $$ to help offset the price of plugin hybrids or electric cars (and to pay for the grid needed to power those cars).

On the other hand, if the goal is to move cars and get $$ in peoples' pockets now, then okay. But it's just more tax cuts/spending, which someone will have to pay back at some point in the future, someone who will not have gotten any benefits from the spending (unless you consider the slight benefit of fewer emissions in the US).