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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (308344)	10/31/2006 4:16:58 PM
From: RetiredNow	Read Replies (2) \| Respond to of 1572099

1 - Oil isn't just used for vehicles. If you are familiar with Pareto Analysis, it states that you should go after the 1 or 2 issues that cause 80% of your problem. Cars and trucks use 66% of all the oil we use in the US. So it's an obvious place to start. 2 - Your ignoring interest on the government spending to subsidize the cars. True, but of course, I didn't count the time value of money either. That's what back of the envelope estimates are all about. High-level feasibility. Interest goes both ways though. Interest on our cost savings and interest on money paid out. 3- The flex-fuel hybrids might easily cost more than $30K. The average price for a new car now is over $28k. Not true. Prius hybrids cost $25-30K depending on where and when you buy it. The conversion cost of making a gas car into a flex-fuel car is $150. That is a very commonly cited figure. So presumably, the incremental costs on building this into new cars on the factory floor would be cheaper. With scale of production, these cars can easily stay under $30K. 4 - Your ignoring the cost of the flex fuel. Your calculating a 75% reduction in oil use, but the cars are "flex fuel" burning some mix. If they are burning ethanol or biodiesel or whatever you have to count the cost of that fuel, which may be more than the cost of gasoline. That is true and that may completely offset the cost savings to American consumers. However, the difference is that American consumers will be paying American farmers for their ethanol instead of Saudi sheiks who then give money to terrorists. Enriching American farmers will have a multiplier effect on our economy, which will boost our standard of living, create jobs, etc. 5 - If cars become more fuel efficient or otherwise cheaper to operate you may get an increase in miles driven, esp. if your subsidizing the cost of the car (so more people might have cars). Nice try, but this is not true. Miles driven has proven to be remarkably inelastic in the face of fluctuating gas prices. 6- Would your subsidy reply only to people who turn in an old car, or would you give it to everyone buying a new car? If you give it to everyone buying a new car you will probably have to replace more vehicles than you anticipate. Demand for cars is growing, and would grow more if you subsidize them. Also if you provide subsidies for new cars people may junk their old cars earlier. This helps in terms of reducing gasoline use, but causes you to have to shell out money quicker, and pay more interest. Don't know, but I think it would have to be structured to create the incentive to get rid of your gas vehicle and replace it with the new type car. Of course, each person would only get one of those incentives.