ArcaMax

Government cheese comes in many forms - but we only seem to mind when it's doled out to some trailer park dweller or inner city "welfare queen." If it's General Motors, say - it's a-ok. Don't think so? Then what do you have to say about the multi-million dollar taxpayer financed kiss that Washington just blew GM's way?

GM apparently can't figure out how to build cars people are willing to buy (at a price they can afford) on its own nickel, so it asked for - and received - a massive handout to subsidize both the R&D and the "sale" of its forthcoming Volt hybrid electric car.

Legislation (the Transportation and Domestic Fuel Security Provision) passed during the recent rain of federal Manna upon corporate America provides tax credits worth almost $760 million to help push the Volt when it finally gets here (several years later than it needed to) circa 2010.

The problem - according to GM and anyone who understands basic economics - is the Volt's sans-subsidy price, which GM itself publicly expects to be in the mid-high $30k, low $40k range. And at which point, incidentally, it would still be taking a loss on every one it "sold." But a $40k economy car is an absurdity, like ordering a diet soda with your triple decker Thickburger and expecting to lose weight.  The whole point of owning a Volt (or any supposed "economy" car)  is to save money - not just gas. Right? It's hard to see how you're gonna save much money by spending so much of it to buy a car that's so doggone expensive - no matter how easy it is on gas.

GM knows the Volt won't sell at the price it must ask in order to make the project anything other than a giveaway, which is the last thing an increasingly desperate GM needs at this point. So, instead of doing what the  "free market" demands (or should demand), that is, figuring out how to build the thing economically, so that it can be sold at a profit on its merits, what does GM do? It pursues - heaven forfend! - socialism. It asks for - and gets - the taxpaying masses to subsidize its for-profit venture. It hopes that, eventually, it will reap the profits, too - all of them.

The taxpayer, meanwhile, will get the proverbial empty bag. Most of them, anyhow.

The few who line up to "buy" a Volt (and I'm sorry, but when you acquire something the seller sells at a loss or which is subsidized in one way or another, the term "buy" is a shifty and dishonest one, hence the quote marks) will get a $7,500 tax credit to make the acquisition more palatable. But even with this extremely generous bit of corporate welfare tossed in to the mix, the Volt will still cost about as much as an entry-level luxury sedan such as a Lexus ES350 or a loaded-up Honda Accord.

Which means, in all likelihood - unless the laws of economics and common sense have been upended - that the Volt will fail, even with the handout.

I have ranted at length about this before, but the obvious bears repeating here: People who fret about paying an extra $100 per month for gas are, for the most part, people not in a position to buy a $30,000 car. Or even a $25,000 car. Or, frankly, any new car at all.

When you are strapped for cash, what is the last thing on your agenda? You know it. Buying a new car when you're worried about money is about dead last. Keep the old beater going; better yet, buy a decent used econo-box. They are as common as cockroaches, get 30-plus mpg and cost maybe $6,000 or so in very good shape. Buying a brand-new $30,000-$35,000 car - even if it comes with a $7,500 subsidy - makes about as much sense if you're earning $40k per year as going for a swim with a boat anchor.

Granted, in the easy, no-check credit era when people could use their over-valued (and over-mortgaged homes) as ATMs, it might have worked out. People were able to buy that which they could not afford due to the miracle of low, low payments and the willingness of creditors to provide them without too many questions asked. Not so much anymore. Been reading the papers lately?

That is over - probably for a generation, if not forever. People who really shouldn't be given much credit aren't going to get it. And those who can get it are now a lot less likely to use it unless they absolutely have to. And buying something like the Volt doesn't fall into the "have to" category, does it?

Meanwhile, GM will filch the taxpayers' pockets - courtesy of the 18-inch biceps of Uncle Sam - of a cool $758 million. On top of the $25 billion in Bail Out Money it also received.

I don't know about you, but the whole thing makes me a lot less resentful of the trailer park meth addict who gets his $500 disability check every month - or the $800 WIC that goes to the "welfare queen" in downtown Detroit.

They, after all, aren't living in multi-million dollar Grosse Point McMansions, as GM executive are. And they don't "earn" more in a single month than most people out there in the real economy manage to squeak by with during an entire year - or even a lifetime. Maybe they ought to get into the car business. Seems there's more money in it.

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www.ericpetersautos.com or EPeters952@aol.com for comments.