U.S. support for Detroit would buy 50 million Tata Nanos

G.M. and Chrysler are asking the politburo in Washington for more rubles (nytimes). Between the 25 percent tariff on imported light trucks (SUVs) and direct cash infusions, it seems likely that the U.S. taxpayer is being bled to the tune of $100 billion over a 2-3 year period. What does the taxpayer get in return for this money? The right to continue to purchase GM and Chrysler vehicles for $20,000-60,000 each.

What else might we do with $100 billion in this industry? Assuming that we could get a wholesale price of $2000 per car, that’s enough to buy 50 million four-passenger 54 mpg Tata Nanos. The fuel savings from driving Nanos to the 7-11 instead of monster SUVs would save taxpayers $100 billion every year (i.e., the initial investment in the Nanos would be paid back with one year of fuel savings). Current predictions are that the U.S. car/light truck market may shrink to 10 million vehicles per year. Thus with a $100 billion federal expenditure we could give everyone who had intended to buy a car or SUV a free Nano for the next five years. Fifty million American households that had expected to go into debt and make monthly car payments would now have $400 extra every month to buy other things ($240 billion per year). The total amount free for investment in the U.S. economy would be $340 billion per year.

Full Story: Philip Greenspun

(via Robot Wisdom)

3 Comments

  1. Shave off some of those millions saved and buy out the auto workers who would be made jobless as well. Give them a free college degree or the cash equivalent.

    Funny thing is, I got that idea reading a Robert Anton Wilson book from the early 1980s. And he got it from conversations he had in the 1970s and earlier. Maybe now that it appears in a comment on Renigade Futurist it’ll happen.

  2. Of course, if the Nano were sold in the US with legal safety and emissions controls, it would cost 19,995 MSR. Also, while this has nothing to do with the US auto industry, a cheap affordable auto is the last thing that India needs. With India’s problems with pollution, overcrowding, and bad roads, 50 million new cars on the road could be a disaster. Does seem, however, that you could create and entire mass-transit industry for 100 billion. Plenty of jobs required to develop more energy efficient mass transit and to manufacture and maintain same. Cars, even electric cars, are a pretty terrible model for transportation in developed countries. Oddly, they will stay necessary in less developed areas with sparse population, where no one goes with enough volume and frequency to justify permanent infrastructure beyond a dirt road.

  3. Okay, you get your Tata Nano. I’ll take the Chrysler 300. We’ll see who walks away from the head on collision. A Nano has better crash protection than a scooter (which it’s designed to replace), but it’s barely more than a speed bump on American roads.

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