The ceaseless cycle of auto subsidies — Tesla & Toyota edition 

Yesterday, the President touted all the positive effects of his stimulus, bailouts, and earlier energy bills:

But thanks to loans through the Department of Energy, which helped provide Tesla motors with the financial wherewithal to expand, that shuttered plant is soon going to reopen.  (Applause.)  And once again — once again, it will be a symbol of promise, an example of what’s possible here in America.

Tesla is joining with Toyota in a venture to put a thousand skilled workers back to work manufacturing an all-electric car.  (Applause.)  And this is only the beginning.  We’re investing in advanced battery technologies to power plug-in hybrid cars.  In fact, today in Tennessee there’s a groundbreaking for an advanced battery manufacturing facility that will generate hundreds of jobs.  And it was made possible by loans through the Department of Energy, as well as tax credits and grants to increase demand for these vehicles.

“What’s possible in America.”

It’s quite a phrase because of what it leaves out. Obama is talking about What’s possible in America if the government gets heavily involved. Put another way, these electric cars are what’s possible in America if we’re willing to saddle the next generation with more debt.

Think about it, we subsidize electric cars, we subsidize their batteries, we bail out automakers, and we subsidize the R&D for electric cars. All of these policies, through outlays and tax credits, add to the future deficits. If we’re willing to be irresponsible with money, we can create jobs and create new technologies.

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Timothy P. Carney

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