What was he thinking? - Manzullo: Congress Should Expand "Cash for Clunkers" Program to Allow Vouchers for All Vehicle Purchases

Here's an excerpt from Don Manzullo's e-mail announcement:

[ROCKFORD] U.S. Rep. Don Manzullo (R-IL) today said the federal government should dramatically expand the popular “cash for clunkers” program by removing all conditions and giving vouchers to all Americans who buy a new vehicle. Such a program would energize our economy, re-start the auto manufacturing supply chain, and put Americans back to work, he said.

Manzullo voted Friday to shift an additional $2 billion in previously-approved federal funds to the original cash for clunkers program, which was frozen late Thursday after officials realized the original $1 billion appropriated for the program was exhausted after just a week in operation (it was scheduled to run until Nov. 1).

He goes on to claim:

The original program gives prospective car buyers up to a $4,500 voucher for trading in a gas guzzler (18 mpg or less) in exchange for a more fuel-efficient vehicle. According to the Alliance of Automobile Manufacturers, the initial $1 billion cost of the cash for clunkers program generated $5.5 billion in economic activity, including substantial tax revenue for state and local governments.

Working these numbers, the $1 billion is divided up into $4,500 vouchers, equaling a sales of 222,222 cars. These sales "generated $5.5 billion in economic activity" or, $24,750 per car. Let's continue with his e-mail:

Manzullo introduced legislation earlier this year to give Americans a $5,000 voucher to purchase a new vehicle, no strings attached. The New Automobile Voucher Act of 2009 (HR 1606) would have provided a one-time, $5,000 electronic voucher from the U.S. Treasury at the point of sale of a new vehicle through the end of 2009. It would have provided vouchers for 15 million new vehicles (original cash for clunkers bill covered 250,000 new vehicles).

Now, the bad math starts to show. $1 billion / $4,500 = 222,222 not 250,000. Now, he wants to provide $5,000 vouchers for 15,000,000 million new vehicles. Let see, $5,000 x 15,000,000 = $75,000,000,000 (yes, that's $75 billion)!

Of course, it keeps getting better:

Every one million in new vehicle sales has the following impact on the economy:

* Creates 60,000 jobs (10,000 at vehicle assembly plants; 50,000 at suppliers, auto dealers, and other businesses).
* Provides $750 million in tax revenue to the federal government.
* Provides $1.4 billion in sales tax revenue to states.
* Saves federal government $1.4 billion in unemployment payments, food stamps, job retraining and COBRA health subsidies.

So now we see what the results may be. For every 1 million cars there is:

• $750,000,000 in federal tax revenue.
• $1,400,000,000 in state sales taxes.
• $1,400,000,000 "saved" in unemployment payments, food stamps, job retraining and COBRA health subsidies.

The total of these is $3,550,000,000 ($3.55 billion). This where my seemingly simple mind gets lost. How is it a benefit to the tax payer to take $5,000,000,000 ($5 billion) in taxes ($5,000 x 1,000,000 cars) and have $1,450,000,000 ($1.45 billion) (or more) of that money just disappear?

How about this much simpler "Stimulus" plan: Declare that cars will be completely tax free for a certain period of time! Let's say, until 1/1/2010. Here's why:

• It will still greatly encourage car sales
• It will still "save" unemployment payments, food stamps, job retraining and COBRA health subsidies.
• No new taxes to "pay for it".
  
• All for less than half the cost - $2,150,000,000 ($2.15 billion) in "lost" tax revenue.

I don't know about you, but, I would certainly be much more likely to buy a car if it were tax free. Is that not stimulus enough? Even if you only sell half the number of cars, it looks to me like you (the people) are still ahead.

What am I missing here?

-Bob

Props to Sam Graves - H.R. 3435- Cash for Clunkers.

From Sam Graves' weekly "This Week in Washington" e-mail update:

4. H.R. 3435- Cash for Clunkers.

In less than one week, the Cash for Clunkers program exhausted the $1 billion dollars that had originally been budgeted for it. Did Congress review the problem to see if it was working as it was intended? Nope. Instead Washington quickly doubled down and approved another $2 billion dollars in less than 24 hours. It passed overwhelmingly 316-109. I voted against it, but I’m reminded of why many Americans do not want the government in charge of their health care.

Here is one of the very few Congressmen that should be given a pat of the back for "getting it". Clearly he understands that throwing our tax money at a problem rarely, if ever, helps. The 316 id10ts in Washington that voted for this clearly don't get. They must think that You’re just too dumb to spend your own money!

If our government representatives can't get "Cash for Clunkers" right, why would anyone assume that they can "fix" health care?

Thank you Sam for doing the right thing!

-Bob

What's in your wallet?

-Bob

The big bail out

Young Chuck in Montana bought a horse from a farmer for $100. The farmer agreed to deliver the horse the next day. The next day he drove up and said, "Sorry son, but I have some bad news, the horse died." Chuck replied, "Well, then just give me my money back." The farmer said, "Can't do that. I went and spent it already." Chuck said, "Ok, then, just bring me the dead horse." The farmer asked, "What ya gonna do with him?" Chuck said, "I'm going to raffle him off." The farmer said, "'You can't raffle off a dead horse!" Chuck said, "Sure I can, Watch me. I just won't tell anybody he's dead."

A month later, the farmer met up with Chuck and asked, "What happened with that dead horse?" Chuck said, "I raffled him off. I sold 500 tickets at two dollars a piece and made a profit of $998." The farmer said, "Didn't anyone complain?" Chuck said, "Just the guy who won. So I gave him his two dollars back."

Chuck grew up and works now for the government. He was the one who figured out how to "bail us out".

-Bob

500 Million Americans a month to lose their jobs...

Straight from the Speaker's mouth:


Since there are only 305,831,640 people in the US (http://www.census.gov/main/www/popclock.html), how can we possibly lose 500,000,000 jobs a month? Since she appears to have said this on our before January 24th, 2009, doesn't that mean that as of February 11th, 2009 all of the jobs are gone now? What are we to do?

-Bob

CPSIA - The De-stimulus program

It appears that I'm little late in finding out about this one. It appears that back in August 2008 Congress passed the Consumer Product Safety Improvement Act of 2008. This was sponsored by Illinois Congressman Bobby Rush and quickly signed into law by President Bush.

As is more and more typical of our government representatives, their good intentions often produce bad consequences. This is a prime example of good intentions gone wrong. It also a prime example of what happens when you vote on a bill that you didn't read. And, this one is only 63 pages long (http://www.cpsc.gov/cpsia.pdf)!

As of yesterday (2/10/2009), what will now be know as National Bankruptcy Day, many children's products are now illegal. Common examples include ATVs, bicycles, and motorcycles. But it certainly doesn't stop there. Everything made for children is affected. New mandatory testing requirements (don't let 'em fool on this one) make even the resale of virtually all children's products nearly impossible.

I can't imagine a better way of de-stimulating the economy... Then again, there's that $1,000,000,000,000 "stimulus" plan that promises us a new job for every $225,000 that we spend on it. Now that's deal!

Back to the issue at hand. We need to take a stand and make the CPSIA go away. I signed at least three petitions today (http://www.tomself.com/), (http://www.petitiononline.com/BMXCPSC/petition.html), (http://www.ipetitions.com/petition/economicimpactsofCPSIA/index.html). Tomorrow I call the id10ts that call themselves my representatives...

-Bob