Wednesday, December 24, 2008

Government-backed loans for auto buyers?

Mr. Parks' plan to solve the auto industry mess:
The crises in the automotive industry puts five per cent of the North American economy at immediate risk. At stake are not just the vehicle producers but also parts suppliers, the distribution and financing networks and their workers.

The Bush-Harper automotive plan offers loans to restructure the producers' debt with the goal of an orderly transition to new corporate owners. Naturally, financial markets reacted badly to the Bush-Harper plan because nobody wins, except perhaps the new owners, whoever they may be.

An effective assistance package could, and would, address the entire sector of the economy.

Consumers should be offered government-backed loans to purchase vehicles, in effect extending the CMHC insuring of mortgages to financial institutions to vehicles.

Taxes from both employers and employees and savings in unemployment payments should be diverted to assist workers and stabilize the workforce. During the financial crises, supplier and credit payments need to be guaranteed.

As matters stand, Harper and Bush are demanding that a barely functioning credit system take more losses

My plan would, if adopted, address the entire North American automobile industry.

In contrast, the Bush-Harper plan serves precious few other than the new owners of the automotive industry. Nearly everyone else loses.

Eugene Parks
Victoria, B.C.
Food for thought, as always...