The auto bailout. Ugh. Though I didn't care for the size, scope and unaccountability of the financial sector bailout, in principal I agreed with it, because a financial institution failure would have undermined the very infrastructure of our economy. I disagree with the current auto industry bailout, and I am none too pleased with the Bush administration's offering up of $17.4 billion to the Big Three to pull them out of their woes....because no amount of government money will pull them out of their woes. Alternatively, an organized, carefully executed Chapter 11 bankruptcy would address far more of the industry's fundamental problems. Aside from the facts that 1) the Big Three aren't making a product that people want to buy, and 2) the UAW costs have put the Big Three in an uncompetitive situation, the fundamental problem of the U.S. auto industry is that consumers just aren't buying cars.
THAT is what must be addressed. So here's my practical solution with Bush's "Christmas gift" of $17.4 billion. Still give them that money (and so much more), but in a different form. Effective immediately, the U.S. government will give a $3,000 downpayment for every new American car purchased. Consumers must otherwise qualify for a standard auto loan, and each household would be limited to just one purchase, and the $3,000 "gift" is not taxable. This would drive sales of 5.8 million American cars. Now THAT is a stimulus, and puts sales revenue in to the Big Three, not government handouts.
Am I crazy, or might just such a plan work??? At least in the short-term; the 1) and 2) items I list above must still be addressed (but the current $17.4 billion doesn't address that, either).
