Why Gov’t Is Not the Answer
Conservatives proclaim that the government is not the solution to our economic woes… it’s the problem. You might ask, “What evidence do you have that can prove that?” Well, how about a “Cash for Clunkers” program that cost the American Tax Payer $24,000 per a car to encourage individuals, who otherwise would not have been in the market, to buy a car – the average price of the car around $26,900 [1]. This is the same government that is now dictating to the GM and Chrysler how to do business. Can you imagine your business – ANY business – spending 80% of the cost of an item to entice a buyer to make a purchase? In this case, they used our money to do just that.
Okay, so that’s one example – right? Well, how about the other government backed stimulus program – the one targeted at saving the real estate industry. In this program, the government is giving home buyers an $8,000 tax credit. This program was originally estimated to cost us – the taxpayer – a mere $7 billion. It is now on track to cost us double that – or $15 billion. So, what are we getting for our money? Well, according to the National Association of Realtors, the program has created 350,000 new sales [2]. A simply analysis shows that this little program cost the taxpayer only $43,000 per a sale. Oh, and Sen. Reid wants to expand this program, set to expire soon, to the end of 2010. The projected cost – an additional $30 billion dollars. The projected impact– an additional 500,000 in home sales. This means that extending this program will cost the taxpayer $60,000 for each additional house sold. Great idea Harry.
CAN WE JUST STOP THIS NONSENSE PLEASE! Is it any wonder our Nation’s financial house is an absolute mess. Look, I know first-hand people who have good paying jobs, who could well afford to buy a car without any incentive by the government, who were in fact in the market to buy a car. And here comes the government, dropping eight grand in their lap for doing something they were going to do anyway. And one by one, the politicians step up to the microphone and proclaim what a great job they are doing for our benefit.
I thought we had Czars with vast experience in business giving the President advice on how to best stimulate the economy. I guess we have a new adage: “Those who can’t succeed in business try politics. And those who can’t succeed in politics become Czars.”
Footnotes:
[1] Edmunds.com Press Release: Cash for Clunkers Results Finally In; Oct. 28, 2009
[2] The Washington Post: The home-buyer tax credit; throwing good money after bad; Oct. 27, 2009