Friday, September 26, 2008

More direct subsidy - enough is enough!

The U.S. taxpayer is going to provide $25 billion in low-cost loans to the U.S. auto industry. Yes, loans are paid back, but the actual cost is still $7.5 billion. And people still ask, "who will pay for free public transit?".

The loans were originally authorised in an energy bill passed last December to finance the retooling of plants for more fuel-efficient vehicles, especially hybrid and electric cars. But they have become a crucial prop for Detroit carmakers.
The continuing resolution provides funding for $7.5bn, which is the estimated subsidy on the loans – in other words, the cost to the government of providing them at well below market rates.FinancialTimes