A very important part of your equation is missing though.
$3B spent for $350M saved.
You assume that the auto manufacturers just pocketed that $3B as profit. That would be a false assumption. Those manufacturers have to pay for parts, labor, operating costs, debt reduction/retirement, and general overhead. Of course, Labor is the biggest cost of the equation. After all those costs are subtracted they are left with "profit" if there is any. Right now Ford Motors is reporting healthy profit margins at 8%. Toyota, the presumed "Big Winner" in the cash-for-clunkers is actually losing -2% every quarter.
So even in the WORST case average ... 92% of that $3B spent went back down the food chain and into each of the regional and local economies mostly in the form of labor compensation. Money pumped into the economy and not simply in the bank accounts of the auto makers. Money that workers then spend at the grocery store and the mall which begets more paychecks for those store workers.
$2.76 Billion free flowing back into the business machine of America. Yea. I say that's pretty good. The gas savings just about covers the Tier-1 profit makers.
Job creation and retention. The ability to keep business open and running. People making a paycheck as all that work and money trickles down the economic food chain.
Don't begrudge the profit margins and the companies taking it. God knows I sure didn't step up with my savings money to invest in them when they started thier businesses. So I sure don't begrudge them taking a profit for the risk they take each week to keep thier doors open.
Granted ... my reply is not ment to fully encompass and explain "Trickle Down Economics", but it's to get you think about the ideas that make the American Economy "Go". I just couldn't let the original post attempt to tread into the land of scare-tactics. I will say this though: Obama did pull the cash-for-clunkers play right out of the Regan Republican Handbook. Smart move, just bad PR in the process by his administration.
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Note to G-Bitch: Don't even try to comment on this post. The concept of REAL WORK for REAL PAY is too alien for you. Those workers are not "Entitled" to a paycheck. They EARN it. So sit back. STFU. Move on to troll elsewhere.
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2-pennies
Re: well one thing worked.......or did it?
Member #: 35888
Registered: 2/1/2005
Posted:
1013
Occupation:
Poor Driven Cable Worker
Location:
Planet Earth
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