Where is modern civilization heading?

As a society are we heading in the same direction as the ancient Romans? If so the question becomes.......

Are our leaders fiddling while civilization burns?

While we ponder the question I will post my personal thoughts on this blog. Often I will focus on current events that catch my interest, however I am not and do not pretend to be a news organization. I'm simply a guy with his own thoughts on issues that I believe affect our country and society.

Be forewarned, I have been accused of being a right wing thinker and if that is offensive please move on. Remember, this is my blog and my opinions, and unlike many facets of our already over-governed modern society they are not being forced on anyone.

However, please feel free to leave your comments, good, bad or indifferent, after all this is a free society we live in (at least for now).

Friday, December 23, 2011

Why do many government sponsored "Green" projects have the stench of something "Brown"?

Since the launch of the Chevy Volt, the plug-in hybrid electric vehicle built by GM (acronym for Government Motors (formerly know as General Motors) I have been watching to see one of these cars cruise down the road, unfortunately I am still waiting. The thought of an "electric car" intrigues me as much as the next guy, however I have a hard time imagining that they will become mainstream anytime in the near future. I say this for two reasons, first their limited range on battery power alone, and second the much higher initial cost .

Unfortunately neither of these issues on the surface are the real concern that any of us should have with this vehicle, the real concern is far more frightening....

Lets for the  moment set aside my first concern as this has been overcome to some extent by the use of gasoline as a secondary energy source to  power a generator to run the car once the batteries go dead after about 40 miles of travel or so. Funny, that this is still promoted as an "electric car" by many, go figure. However, while we are on the subject of electric cars can someone please explain to me how these are intended to help the environment? After all, these cars must be plugged into an electrical outlet to recharge, this would be the same outlet that is fed by coal burning CO2 spewing power plants in many cases. What am I missing in the scenario?

But as usual I am off track so lets get back on topic and discuss my second concern about the much higher initial cost. If you have taken the opportunity to price out one of the "technological miracles" your probably thinking that priced around the $40,000 mark they are not that unreasonable. Unfortunately that is not the cost I am referring to.

Based on a Mackinac Center study of government subsidies throughout the manufacturing process and distribution chain, the actual cost of a Chevy Volt could currently sit at somewhere around $275,000 each — with about a quarter-million dollars of US taxpayer subsidies going into every vehicle. Here's a brief overview

Each Chevy Volt sold up to this time may have as much as $250,000 in state and federal dollars in incentives behind it – a total of $3 billion altogether, depending on how many government subsidy milestones are realized.  Mr. James Hohman assistant director of fiscal policy at the Mackinac Center for Public Policy reviewed total state and federal assistance offered for the development and production of the Chevy Volt. His analysis included 18 government deals that included loans, rebates, grants and tax credits. The amount of government assistance outlined in his review does not take into account the fact that the federal government currently has a 26 percent ownership stake in General Motors. As well, the actual incentives per car will vary over time based on the total number of units eventually sold. Unfortunately for GM and the Obama administration  the Volt has proven to be a very poor sales proposition, so far it has sold just over 6000.

The Volt subsidies flow through multiple companies involved in production. The analysis includes adding up the amount of government subsidies via tax credits and direct funding for not only General Motors, but other companies supplying parts for the vehicle. If incentives given to battery manufacturers to produce batteries the Volt may use are included in the analysis, the potential government subsidy per Volt increases to $256,824. For example, A123 Systems has received extensive state and federal support, and bid to be a supplier to the Volt, but the deal instead went to Compact Power. The $256,824 figure includes adding up the subsidies to both companies.

The $3 billion total subsidy figure includes $690.4 million offered by the state of Michigan and $2.3 billion in federal money. That’s enough to purchase 75,222 Volts with a sticker price of $39,828.

“It just goes to show  there are certain folks that will spend anything to get their vision of what people should do,” said State Representative Tom McMillin, R-Rochester Hills. “It’s a glaring example of the failure of central planning trying to force citizens to purchase something they may not want. … They should let the free market make those decisions.”

“This might be the most government-supported car since the Trabant,” said Hohman, referring to the car produced by the former Communist state of East Germany.

Sadly the above story is not the exception but more of the rule when it comes to government involvement in "green" projects, does anyone recall Solynda and its solar energy government loans? When will they learn.

On a final note lets look at a few photos to compare how the Volt fits into the scheme of things in the world of automobiles...

1896 - The Roberts Electric Car
achieved 40 miles on a charge.
No government cash required
2011 - The Chevy Volt achieves 40 miles
on a charge
at a cost in government
subsidies of $250K each!
2011 Ferrari 599 GTB - Requires no
charging and gets 11-15 MPG and sells for about $325K, just slightly more than it costs to manufacture a Chevy Volt

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