Car Voucher, a Step Above Stimulus Pork?

While we understand the general idea behind the stimulus package and its ability to jump-start the economy, it is easy to see why so many folks are turned off. Items like the $4 million in Pentagon work awarded to Murtech, another of those no-bid contracts that went to the company owned by Robert C. Murtha Jr., 49, the nephew of Rep. John P. Murtha, certainly raise a stink.

For those who do not know, John Murtha is the Pennsylvania Democrat who just so happens to be the chairman of the House Appropriations defense subcommittee. What is most troubling is that at the same time another $150 million in stimulus money has been given to build and maintain an airport in rural Pennsylvania, yes the John Murtha airport.

Just how does stuff like this happen?

Car Voucher, Yet Another Stimulus Option

In recent days we have heard about the renewed push for a government voucher to help citizens purchase a new, fuel-efficient automobile. Like the initial response to the stimulus package, there appears to be support out of the gate for the proposal.

The current idea centers upon a $4,500 voucher that can be used by people to trade an older, nearly worthless gas guzzling auto for a new, fuel-efficient vehicle. The value of the voucher would theoretically be dependent on the differentials in gas mileage between your current vehicle, one that must be at least eight years old, and that of the newer option.

Hypothetically, trading your 18 miles per gallon clunker for a new vehicle that offers 22 miles to the gallon might get you $3,000 say, while trading for one that yields 28 miles per gallon would result in the voucher being worth the full $4,500. The goal seemingly is to max the coupon only when a 10 mpg difference is created.

Supposedly, the plan involves a separate set of numbers for SUVs (5 mpg increase to max the voucher), light-duty trucks (2 mpg increase) and work trucks.

According to the latest gossip, there appears to be great support for some type of voucher plan in Congress. The specific dollar values and respective goals seem to be the debate, not the concept itself.

Proponents indicate the program would create a strong jolt to the economy. First and foremost, it gives individual citizens an incentive to help meet the president’s goal of reducing our dependence on foreign oil. Second, if limited to the purchase of American autos, it could be just the catalyst to jump-start the moribund auto industry. Lastly, it would seem to help the hardest-hit Americans the most if the voucher could only be used for vehicles eight years and older.

In addition, European car sales are reportedly benefiting from such plans. According to at least one report, the idea has increased sales globally by about 400,000 vehicles.

Key Sticking Points

One of the key sticking points of course centers upon potential restrictions. For example, restricting the voucher to American cars only would bring on cries of protectionism yet the supporting rationale for some is that it must help the American auto industry as well as the consumer.

Another is the voucher could prove expensive to the government if large numbers of people took advantage of the program. Of course, many people insist that would be a better use of taxpayer dollars as it would be helping the consumer even as it is helping the automakers, something we are doing already.

A third concern is that the process could re-institute a borrowing craze as folks who could not truly afford a new vehicle utilize the voucher but end up now having monthly payments once again.
In fact, for some folks, it would make far more sense for them to trade up to a newer, fuel-efficient, used option instead.

But now that the stimulus genie is out of the bottle, there will no doubt be constant pushes for options that will jump-start the economy. The auto voucher seems to be one that is garnering significant support.