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Back To Work in 30 Days
Basis: Right or wrong, the US is an automotive driven economy. Because of all the negative publicity about layoffs, greed, and bailouts no one is spending money beyond the essentials. Fear is a self fulfilling prophecy. The well is not dry, but we do need to prime the pump.
Fact: Government entities from small towns to federal agencies use millions of vehicles to provide essential public services (fire, police, garbage, USDA). At any given time, a percentage of those vehicles are worn out, need repairs, pollute the air, and interrupt timely delivery of services.
Key Move: Initiate a high velocity nationwide program to accelerate replacement of all government owned vehicles for towns, cities, counties, states, and federal agencies over the next 24 months. Similar to the infrastructure concept that will take years to initiate, Vehicle Accelerated Replacement Program takes 30 days to begin restoring confidence.
Fact: Over the next few years, tax dollars will repair or replace these vehicles one by one anyway. An modern, updated fleet will improve reliability of essential services, reduce gas consumption, cut repair costs, decrease pollution and save downtime currently lost while vehicles are being repaired.
Immediate Result: Union and nonunion automotive workers go back to work as soon as the first orders hit the books. OEM suppliers who make radios, tires, seats, bumpers, electronics, glass, steel, and etc. will be calling people back to work to supply the manufacturers. As employers in the supply chain begin to ramp up production, their workers are removed from the unemployment numbers, they resume paying payroll taxes and supporting their families.
Secondary Result: Workers begin to feel confident because they have two years’ work ahead. Confidence spreads as those workers begin to catch up on late payments, make purchases like roofing, housing, consumer goods, and etc. which quickly feeds confidence into other segments of the economy. Other sections of the economy begin making vehicle purchases, adding to the confidence.
How it works: Applications from participating agencies are sent to a central clearing house where the funding is authorized for a maximum amount based on the vehicle type, equipment, and the vehicle it replaces. Priority will be for the oldest vehicles first, the old vehicle must be scrapped and recycled. Once the purchase order is in hand, the local entity shops three local dealers for the best value within the price range allowed. The order must be placed within two weeks of receiving the authorized purchase order. The central clearing house will balance purchase orders by type and date assuring a smooth production flow over the 24 months, aiming for 100,000 vehicles per month.
Brands eligible: Any vehicle made by US citizens on US soil. Pit the US Big Three against the foreign companies manufacturing on US soil. Only good competition makes you sharp. This plan is not intended to benefit the automakers, but the citizens and taxpayers.
Side Benefits: All manufacturers are competing against each other in quality, gas mileage, warranty, reliability, and price. Each manufacturer will be forced to deal internally with their own competitive weaknesses without government intervention. Investment in facilities, equipment and infrastructure will be made as the economy improves sparking even more confidence.
Why it’s the best option: V.A.R.P. only accelerates costs temporarily, the pay back is immediate, it’s not a loan, it will boost confidence and stock values. The government takes no ownership of any company, they essentially become a huge consumer.
Cost: Twenty four months, 100,000 vehicles per month with the average cost driven down to $17,000 per unit. One hundred thousand vehicles per month "costs" only $1.7 billion. Twenty four months at $1.7 billion is only $40.8 billion, which the government will end up giving to GM, Ford, & Chrysler within 2 years anyway. At least the taxpayer gets something in return, JOBS and better services through an improved fleet.
How many cars is 2.4 million? Divide the total units by 50 states, just for averages. That means Indiana for example will get 48,000 vehicles over a 3 year period. Indiana may have more counties than most states, but nevertheless, each of 92 counties would receive 521 vehicles over the 24 month period. Now, that's a lot of vehicles, so maybe one snow plow equals 2 car credits, maybe a school bus is 3 car credits, maybe an ambulance is 7 car credits. The point is still the same, we invest in putting people back to work in 30 days, not 6 months, not bailing out private banks. We put our investment in government services and serve the people.
Still too many cars? Make the Red Cross part of the program, add the YMCA, the Senior Citizens groups that transport patients to hospitals, who cares? As long as it puts people to work and primes the pump.
Future Tax Revenue: What about the tax revenues that will continue to flow to local entities and will not be needed to replace vehicles. Escrow for the next go around of
vehicle replacements.
posted by 66.228.105...
, Wed, 1 Apr 2009 12:45:19
, Wed, 1 Apr 2009 10:32:46
, Wed, 1 Apr 2009 13:35:51
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