The Federal Government Vs. The Federal Government On The Auto Industry

by John Hawkins | May 19, 2009 11:58 am

Obama has completely wasted billions of dollars in taxpayer money on the auto bailouts and the results have been disastrous. American jobs are being sent overseas with taxpayer money, in what may be the most corrupt deal since the Teapot Dome scandal, Obama has put his union allies in charge of Chrysler and the government is now getting involved in who gets paid what and the type of cars being made at these companies.

Yet, despite the fact that the auto industry is reeling, the government is hammering them with staggeringly expensive new regulations[1],

President Barack Obama’s new fuel and emission standards for cars and trucks will save billions of barrels of oil but are expected to cost consumers an extra $1,300 per vehicle by the time the plan is complete in 2016. Obama on Tuesday planned to announce the first-ever national emissions limits for vehicles, as well as require an overall or industry average fuel efficiency standard at 35.5 miles per gallon.

…Administration officials said consumers were going to pay an extra $700, anyway, for mileage standards that had already been approved. The Obama plan adds another $600 to the price of a vehicle, a senior administration official said, bringing the total cost to $1,300 by 2016.
That official said the cost would be recovered through savings at the pump for consumers and if gas prices follow government projections.
Under the changes, the overall fleet average would have to be 35.5 mpg by 2016, with passenger cars reaching 39 mpg and light trucks hitting 30 mpg under a system that develops standards for each vehicle class size. Manufacturers would also be required to hit individual mileage targets.

…The auto industry will be required to ramp up production of more fuel-efficient vehicles on a much tighter timeline than originally envisioned. It will be costly; the Transportation Department last year estimated that requiring the industry to meet 31.6 mpg by 2015 would cost nearly $47 billion.

Let’s see, AT LEAST 47 billion dollars in new costs, which the auto industry can’t afford to pay on the back end and a $1,300 increase per car on the front end that gives consumers a big disincentive to buy a new automobile. Additionally, estimates of this sort by the government almost inevitably understate costs. If it ended up really costing 100 billion plus to implement these changes, would anyone be surprised?

How many billions more of our money will be thrown down a rathole at the Big 3 because of this? How many more American jobs will be shipped overseas? How many Americans will die in flimsy, unsafe cars because of this decision? Where are the numbers on that? Did anyone in the Obama Administration even consider it before they made this decision or did they know all about it and just assume the blame could be shifted elsewhere?

This is all too typical of the government. On the one hand, it giveth and with the other, it taketh away. The only constant is that the American people get screwed in both cases.

Endnotes:
  1. staggeringly expensive new regulations: http://news.yahoo.com/s/ap/20090519/ap_on_go_pr_wh/us_obama_autos

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