Saturday, September 26, 2009

Government Subsidy for a Car that costs 90,000

In a stunning move, The US government has taken a turn toward the wealthy and away from from the union label with its 528 million dollar loan to produce a hybrid sports car in ... Finland.

Fiskar Motors, A California startup company backed by Al Gore was the recipient of the loan, which followed several requests that were rejected.
Makers of the proposed Fiskar Karma, a gas electric hybrid sports care with an annualized MPG of 100 miles per gallon, received the loan after several other manufacturers were denied. The Fiskar Motors loan follows a similar award of more than 450 million to Tesla Motors. Telsa is most notably known for its Tesla Roadsters, an all electric sports car.

Government subsidies are not uncommon, particularly in the area of new technologies. Government subsidies assisted with the development of safety equipment such as safety belts and air bags. These items were first installed as expensive options and once demand became strong enough, they became options and standard equipment on a more wide-spread basis.

This represents the first time that the US Government has gotten into the practice of subsidizing individual companies to produce a whole car. Whats-more, the car being produced is a sports car, which flies in the face of the green movement where you save, not waste. Additionally, the car costs nearly 90,000 dollars and is in a market for only the wealthiest Americans to be able to afford.

Has the US Government lost its mind? How fast does the President think a car at 90k per will affect the US carbon emissions levels. Given that we are still heavily coal fired electrical generation as a nation, what would the costs to fill up the batteries be in the face of the Cap and Trade system trundling through Congress? Remember President Obama said last year in the campaign that under his proposals, electricity costs would necessarily skyrocket.

The Wall Street Journal reports that the Energy Department Spokesman Matt Rogers said Fiskar Motors was given the loan primarily to produce a family sedan that would be in the 40,000 range.

The problem here is that the Government's loan will be used in the short term to defray the cost of the technology to make the price come down to 89,000 for the sports car. It is hoped that the technology will become more widely adopted and that the demand will reduce component cost to make large scale production possible. It is a fraud on the American people to think that the proceeds from the loan will be used solely for the design of the family, affordable version.

Chevy announced the Volt last year, a small electric only hybrid that is already in the range Fiskar hopes go get to... in 5 years. How much more effective would the 500 million dollars be to help an American car company that is in hock up to its eyeballs produce a car that will be in the price range of millions more Americans, right now?

These loans, particularly the Fiskar Karma loan are benefiting the wealthiest people at the expense of the American tax-payer. It is a lie upon lie to try and convince the people of this country that such subsidies are necessary. What happened to fostering competition. Shouldn't grants have been provided on a competitive bases to find the best way to execute on this strategy, rather than provide one or two companies with the significant sums that have been released.

We are being told that hybrid cars and electric cars are the wave of the future, yet we have neither the electrical production nor distribution infrastructure to support the demand necessary to make the electric hybrid dreams a reality. Couple this lack of infrastructure with the increase in energy costs associated with carbon based energy taxes under Cap and Trade and even fewer Americans will be in the wealth bracket to afford the Green Economy.

Perhaps that is the objective goal. We will achieve on the promise of a greener planet through the systematic dissolution of the industrial state. It's a brilliant plan in that if you simply make it impossibly expensive to maintain the current way of life, people will scale back to the point of affordability. There is only one flaw: The government is using these plans and their taxes in order to fund Healthcare and other government programs in order to provide for its cradle to grave aims. Who will be able to afford electricity to power these kinds of vehicles? What will the government do when electricity overtakes gasoline as the dominate source of vehicle fuel? Do you think that the excise tax on motor fuels today will go away?

Hybrid cars are heavier than their gas counterparts. They will exact a heavier toll on our streets and highways, increasing the demand for long term maintenance. The future loss of gas taxes at the state and federal level will certainly result in higher taxes on your electricity. Complicated new systems will have to be developed to separate the power you use for your home and heat to be separated from your car or a federal use tax will be derived based on the miles you put on your car. There are already pilot programs in some states to track how many miles you drive for the purpose of collecting an annual tax. Democratic Representative Earl Blumenhauer from Oregon put a bill into Congress this year (HR 3311) to allocated 154 million to research how a per mile vehicle use tax utilizing toll roads and GPS units or roadside RFID tags that would tell the central system that you passed a certain point on the road. RFID is a kind of tag that sends a signal when it gets close to a transmitter receiver device. Each RFID tag has a unique serial number, like your Social Security Number. The Government would then have access to your vehicle's location anywhere on the road it may be. A new cottage industry will spring up to spoof these ID tags and we will be forced to pay more for lifelock identity theft services because the government isn't going to back off of its claims. Additionally the existence of this kind of information should be considered a serious breach of privacy and one wonders why the ACLU isn't spending its money to fight this for what it is.

You don't have to be a genius to see the train wreck that is coming. Only common sense can stop the nightmare the Democrats have concocted. It may be noble to want health care for all and to not harm the environment, but the manner in which one achieves these aims is the true determination of the nobility we seek. I urge you to demand to see the numbers and how it is going to be paid for before you sign off on any plan your legislatures, city officials and state governments present to you. The devil is always in the details and these details are both too dark and murky to be seen as reliable. The President, the members of Congress, the state executives and your City Council members all work as servants to the people. Do not presume to allow them to become your masters.

Mike Rowland

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