Trust Me
"I'm From The Government And I'm Here To Help"
What’s this? More government handouts?
From an Examiner.com article:
“‘Senator Debbie Stabenow (D-MI), Senator Sam Brownback (R-KS) and six other Senators introduced bipartisan legislation that would put in place a consumer incentive for trading-in a less fuel-efficient vehicle for a new, more fuel-efficient one. The language of the bill is similar to the bipartisan amendment adopted 50-4 by the Energy and Commerce Committee.’ – Press release from Ford Motor Company.”
“’Cash for Clunkers’ is coming. Taxpayers would be wise to wait and see the fine print on this bill because rebate and tax credit programs often aren’t as advertised. Consider this example: Back when Jimmy Carter was president, a homeowner’s energy tax credit was announced with much fanfare. Taxpayers could claim a tax credit for home improvements that saved energy. The way it was portrayed, it sounded as though the government was going to pay for your home improvements. Since my wife and I needed new storm windows anyway, we purchased them and then applied for the credit on our income taxes that year. After filling out the forms and doing all the calculations, factoring in our income, etc., we qualified for a tax credit of only $38.00. We mailed the IRS form, our 1040 and the receipts as instructed. It didn’t take long for the first letter from the IRS to arrive, demanding additional documentation and threatening us with interest, penalties and an audit.
History has a way of repeating itself. The rebate will be ‘up to $3,500′ or ‘up to $4,500.’ The operative words here are ‘up to.’ Anyone who has read the fine print in a cell phone ad or a cable TV ad knows what ‘up to’ really means.”
The article continues:
“What is the true goal of Cash for Clunkers? There seems to be a tug-of-war going on between various special interest groups as to whether Cash for Clunkers is intended to help boost auto sales in general, boost domestic auto sales, or conserve gasoline and reduce pollution. The fuel-economy improvement thresholds – as currently proposed – are high enough that foreign brands stand to benefit more than domestic brands because their vehicles are generally smaller and more fuel-efficient. One version of the bill stipulates rebates would apply only to vehicles ‘assembled in America.’ If the goal is to help domestic auto makers, will Ford Motor Company products assembled in Mexico (Fusion, Milan, Lincoln MKZ) be excluded from the ‘Cash for Clunkers’ program? Will Hondas built in Ohio qualify for the program?”
But wait, don’t get excited. There’s always a catch, as the Examiner.com article goes on to explain:
“Under the proposed guidelines, the government cash goes directly to the dealer who sells the new vehicle, not the purchaser. The government’s logic is that this $3,500 to $4,500 rebate can be counted as cash from the buyer, which would help buyers get credit because they’re financing less. On paper, someone who puts $3,500 or $4,500 down on a car loan sounds like a good credit risk, right? The only problem is, this isn’t really cash from the customer. Finance companies (the smart ones, anyway) are wary of deals where people don’t put down any of their own money on a loan. In the finance business this is called having ‘no skin in the game.’ With none of his/her own money invested, the customer can take delivery of a brand new vehicle, and if they can’t make the payments, simply walk away without losing a thing. Then the finance company has a costly repossession to deal with — assuming the vehicle can be located and hasn’t been trashed or stripped. Unfortunately, too many dealers, desperate to make a sale, will pressure their finance sources to buy these deals even if the only money put down is the government-provided Cash for Clunkers money.”
As is usually the case, quite a few people seem to get a big “pick-me-up” when the “benevolent” government offers what appears to be a handout. Free goodies, right? No strings attached, right? Wrong. A big “pick-me-up” where the government is concerned is frequently followed by an equally as big “let-down”. It looks like this is the case with “cash for clunkers”. Don’t get sucked into the latest government scam in “cash for clunkers”, ladies and gentlemen! The only suckers that will get burned are the American taxpayers.
