Tuesday, December 23, 2008
So what happens to all the cars the US government is paying to produce?
We hear about all the cars piling up on the docks and at dealerships since consumers can't or won't buy. Now that the Federal Government is paying the Detroit companies to continue to make cars, who will buy them? Many consumers are scared to buy, and others cannot get loans. It seems to me that the fix is on the demand side rather than the supply side. If consumers would buy cars there would be no need for a "bail-out." Perhaps the Government should pay car companies to pay workers and suppliers, but remain with idle factories. Better still demand stimulus may be the way to go.