What if instead of a bail-out, they gave big rebates to car buyers...?

[123infinity]

Say 5 grand, or 10...or some significant amount to encourage purchasing.
I'm no economist but wouldn't that help the circulation of money and help the car makers at the same time (assuming they aren't building cars at a loss)?

If the government just cuts fat checks to the 'big 3' what kind of control is there over how they spend (or stash) the money?

[demnan]

1. Not going to help if people don't have jobs.

And actually, the car industry itself has been doing that. I got a great price 16,000 on a brand new Toyota Camry in May.

[greguganus]

3. LOL but you bought a Toyota! n/t

[123infinity]

6. Actually I did too, just yesterday! But I'd have looked a lot harder at Detroit with a 10K rebate

if I could get it!
:D

[liberal N proud]

5. No it will not help them immediately but it might...

go a step toward putting some of them back to work. Those who go back to work will have money to pay the bills and if they are earning a livable wage, they would buy other things and put even more people back to work.

It has to start with people going back to work. There will be no work if the companies who produce can't sell what they produce.

Sell it, hire people to make more and sell it and the economy grows from the bottom up.

Give the guy at the bottom $10K and he will spend it, Give the guy at the top $100K and he puts it in the bank.

[Donnachaidh]

2. not real help to people that can't afford them anyway

All this flap over one segment, when thousands are being thrown out of work daily.

[DS1]

4. I need a new car

and would put 10k towards one.

[TheCowsCameHome]

7. As long as it could sleep a family of four.

Because that's where we're headed.

[greguganus]

9. That would be a great ad campaign for the Big 3

"We'd like to see you try to sleep a family of four in a Toyota after your house is foreclosed on! Buy American!"

[TheCowsCameHome]

10. Just think what the potential could be for left-over SUV's ---

Income producing multi-family units.

[deadmessengers]

8. I would personally like to see mandated warranties

A few years ago, Hyundai had a pretty well-deserved reputation for putting out a crappy product. They decided that offering 100k bumper-to-bumper warranties on everything they sold, and that went a LONG way towards clearing that issue up.

My biggest issue with the bailout has been that the Big3 isn't losing money because of the unions, or because of the economy. They're getting killed because they put out one lemon after another for a couple of decades, and that reputation has stuck with them in a big way. It doesn't MATTER what they're doing now, because people (like me) remember most clearly paying six months salary for a car only to have it need a new $2000 transmission after 74000 miles.

I can't think of anything that would fix that perception by putting a stake in the ground and saying "we've fixed the quality problems we've had in the past, and we're willing to stand behind what we sell now".

If the automakers won't stand behind their product, though, and would fight such a suggestion, well - you can draw your own conclusions there.