Taking a page from Washington’s playbook, GM, owned in large part by Washington, is mapping its business model to align with current health care reform.
Car prices keep increasing too much for many people, if they have cars at all. One way to ease the hikes is to sell more cars. Thus, with Washington’s help, millions of Americans will have to buy new GM cars
Buyers may choose other brands if they meet government safety and feature requirements as determined by the Washington Auto Competition Compliance and Evaluation Department, or WACCED, to be established.
Still, there is a danger that some auto manufacturers will have to shut down as they are squeezed out of the market. However, considering the exorbitant prices they have been charging, the high pay some of their executives receive and safety problems of some of their cars, is that such a bad thing?
This hike in “demand” will initially cause auto prices to increase because GM can’t immediately supply enough cars. So GM, with the help of the American taxpayer, will subsidize the purchase of these vehicles with rebates.
These will be larger rebates than ever seen in the past, but they will vary depending on a car’s make and model, which will be determined after getting WACCED approval.
To pay for the rebates, taxes will have to be raised in some circumstances. Those, with Cadillac-like cars (but not Cadillacs) will see a tax increase, as will some auto parts suppliers and all tires manufactured in China. If you are a union employee, live in certain states, or have particular religious beliefs, you may be fully or partially exempt from these taxes.
Of course, there will be a delay in getting the new vehicles as production ramps up. Unfortunately, because of cost concerns, the taxes needed to pay for the rebates and such will begin immediately.
More workers will have to be hired – certainly good news. But, to keep costs in check, their pay will have to be lower than usual. But GM expects these lower-than-otherwise wages to eventually save it, the government and consumers money, as continued automobile price hikes are expected to be minimized.
Naturally, with more cars on the road, the cost of gas will rise since the government will not allow much, if any, additional U.S. oil exploration and production. Meanwhile, it is exploring gas subsidies for car owners.
The subsidies will be determined by a car’s mpg, how often it’s driven and its destinations in keeping with standards to be developed by the Motorists’ Uniform Concerns and Knowledge Evaluation Department, or MUCKED.
The idea is to start subsidizing gas purchases up to a certain amount, then wait for another level of gas purchases to be reached before additional subsidies are applied.
This middle, the so-called “not driving Miss Daisy” catch, has been widely criticized but is seen as a necessary starting point by proponents who expect it to be expanded later. Besides, proponents add, it will take a while before all car models are MUCKED up and subsidies determined.
GM and others in Washington are proposing additional taxes on oil companies to pay for the gasoline subsidies. This proposal derives from environmental and so-called windfall profits concerns.
In time, everything will be OK, assured company and Washington representatives….
This is not an apples-to-apples comparison with the current health care reform package working its way through Washington. And health care is more important than cars and ways to expand health care and lower costs are vital.
But if GM, through the government’s power, were to do such things, it would be outrageous. What Washington is trying to do with this health care reform – and the way it’s doing it – is just as absurd.
