Consider Consumer Stimulus Rather Than Auto Bailout

With government bailouts and endless political rhetoric on how to fix the ailing U.S. economy, here's an idea which will make the American consumer feel good and rev up the ailing auto industry.

Americans are desperate to feel normal again and giving the average citizen disposable income would set forth a wicked wave of stimulus the U.S. economy thirsts for. Part of the 10K stimulus check could be in the form of a voucher which must be used in the purchase of a new Chrysler, Ford or GM product.

According to the IRS, http://www.irs.gov/taxstats/index.html roughly one in three U.S. Citizens incurs a tax liability which give us about 100 million taxpayers. Let's say for example the government allows $10K stimulus payments to each American taxpayer, consumers would have the upper hand again and stimulate the economy by doing what Americans do best, which is spend.

By giving bailout funds to automakers, Chrysler and GM, both can sustain their operating expenses and continue to design and produce vehicles that perhaps nobody wants or simply cannot afford. That doesn't sound like a viable plan. What if two years from now an automaker decides they still can't pay operating expenses and must file bankruptcy? With a limited amount of federal funds available, it only seems natural to make these funds available to the American consumer instead and let them pump money into these companies in the form of sales revenue.

The financial sector bailout has not had the affect it was supposed to, which was to free up credit markets allowing for liquidity to you and I. Instead financial institutions are licking their wounds trying to shore up their battered balance sheets. It's as if the whole financial sector is holding the economy hostage. They have the power to lend but are unwilling to write loans fearing risk of default.

This band aid approach won't solve internal production inefficiencies which need to be addressed if any recovery is on the horizon for the Big 3 and the economy as a whole. But giving power to the people would at least get Americans spending and no recovery will take place until Congress realizes what really drives our economy.