Obama's Appliance Rebate: Good Idea or More National Debt?

US Energy Secretary Steven Chu announced a rebate program for Energy Star appliances on behalf of the Obama administration last July. This is part of the national stimulus program and in theory every state and territory should benefit. Like the Cash for Clunkers program, this is designed to give the economy a jolt and hopefully create more jobs. It is also supposed to save money because the appliances are energy friendly.

Large box stores such as Lowe's, Home Depot, and Best Buy are undoubtedly scrambling to have some type of creative financing available for the masses. It might sound something like "no paymentsfor a whole year" or "no finance charges for six months."

This program is being created with Obama stimulus cash to the tune of approximately 300 million dollars.

Energy Star appliances are great and better for the environment in general. But how many people are going to dash out and buy an appliance they probably would not have considered before this rebate program? What if they can't afford it but are approved to finance a purchase?

Isn't this exactly how the US began the journey with our current fiscal difficulties? Expenditures on credit were abundant and people were spending above their means. Does the intent of the program outweigh the possible ramifications?

The federal deficit is undeniably colossal, in the trillions of dollars and it has the dubious distinction of only getting larger. Many US citizens are concerned for themselves and future generations. Yet the Obama administration continues to advocate more and more spending.

The liberal designers of this rebate program have apparently not stopped to consider different possible outcomes of this particular stimulus idea.

Chances are retail dealers will rally for a few months and then level off, perhaps even seeing sales go down more than a few percentage points. If there is a creative credit potential and it is put into practice the consumers will be busy paying off their new appliances. These same people will owe even more than they did before the advent of Obama's stimulus. The people who bought a new car and traded in a clunker probably have brand new loans as well. Will this slice of the population have any cash left to infuse into consumer goods? The 50 to as much as 200 dollar per appliance probably won't make much of a dent in the economy.

On the other side of the coin, consumers can save in yearly energy costs by buying an Energy Star appliance. They will also save on the cost of the actual item for a two fold savings. We may even make a small reduction in global warming.

The US needs to be more conservative in energy consumption as well as developing new avenues to do so. It is the responsible action to take. Hopefully, only people who can afford new appliances without getting into debt will be participants of this stimulus rebate offer.

Debt and overspending caused the economy to plummet in the first place.

Sources: Capitol News Service
www.energy.gov/recovery