I should add that I'm considering the fundamental economics and not the way the government picks winners and losers. The $7500 battery tax credit is equivalent to paying for all of the gasoline a 40mpg gasoline car would use to go 150,000 miles.Awesome.
So for these small cars the government subsidy is equal to the TOTAL COST of fuel over the lifetime of the vehicle. That's not tilting the playing fields so much as holding it up by one end and shaking.
For $7500, it would make sense to install a cistern on top of a car to collect rainwater if that's what the government thought you should do.
So obviously with Obama picking winners from the throne, the fundamental economics won't really matter. Of course, as demonstrated by the Ethanol disaster, the danger in not understanding the stupidity of the central government plan is that the central planners are fickle and subject to change based on the whimsy of the political winds.
Tuesday, June 02, 2009
Comment of the Day
... comes from this post over at FuturePundit. Someone called Mercy Vestel had this to say, triggered by a post about electricity costs from wind power.