Interesting read - Tesla Bailout
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Take Elon Musk out of the equation (as we know he'll cover/float what needs to be done), sometimes I'm ok with tax payer subsidized "bailouts".
Why? It keeps factories moving (Not just the actual assembly plant in question, but also suppliers to that plant), which keeps people employed, which keeps people paying their rent/mortgages, and making their own car payments and/or purchasing new/newer vehicles, as well as shopping at stores and other places in that region.
Yea, it sucks that the taxpayer base has to absorb it, but in the long run, do you want your neighbor keeping his job and his home, which maintains your neighborhood housing values including your own, etc? Or do you want them defaulting, dragging your home values down, driving out other prospective employers when they see that a valuable employee base is now gone, yada, yada.
Why? It keeps factories moving (Not just the actual assembly plant in question, but also suppliers to that plant), which keeps people employed, which keeps people paying their rent/mortgages, and making their own car payments and/or purchasing new/newer vehicles, as well as shopping at stores and other places in that region.
Yea, it sucks that the taxpayer base has to absorb it, but in the long run, do you want your neighbor keeping his job and his home, which maintains your neighborhood housing values including your own, etc? Or do you want them defaulting, dragging your home values down, driving out other prospective employers when they see that a valuable employee base is now gone, yada, yada.
Shit if you want to get into the weeds about tax credits in the first place, they must reinforce policy at some level. I don't frankly care if people have the latest vehicle and can continue paying their mortgage at the same time. If they cant afford it without subsidized tax dollars, they shouldn't do it at all. I do not believe the federal government belongs in that conversation whatsoever UNLESS we there is a conscious policy decision made stating that we MUST to move to renewable fueled vehicles and that by offering this small tax credit moves the needle in a meaningful manner towards that objective.
Sure it breaks the ice and allows more to afford "new" technology and artificially props up a market for the time that the tax break is in place, but if the artificial increase in sales proves to be detrimental to the industry as a whole once it is removed and sales decrease to ACTUAL market demand levels... then what?
This is exactly how subsidies, once created, never go away and become line items in a longer term budget.... where again, they DO NOT BELONG, IMO.
Sure it breaks the ice and allows more to afford "new" technology and artificially props up a market for the time that the tax break is in place, but if the artificial increase in sales proves to be detrimental to the industry as a whole once it is removed and sales decrease to ACTUAL market demand levels... then what?
This is exactly how subsidies, once created, never go away and become line items in a longer term budget.... where again, they DO NOT BELONG, IMO.
That's not true though. He isn't Tim Cook sitting $250 billion in cash, plus a steady stream of revenue and brand equity.
Tesla is using a lot of cash reserve launching the 3, a model that will make or break the company in my opinion.
Tesla using lots of its cash on hand to prep for Model 3 launch
https://www.thestreet.com/story/142...fy-any-investor-looking-to-buy-the-stock.html
What I'm referring to, is people being employed, paying their bills (I.E. Mortgage) vs. being unemployed and not being able to, putting their home into foreclosure (a high probability), along with many others in the local area in the same boat and dragging YOUR values down because of it.
Not whether or not they were in over their head with what they have.
Your being "Ok" with subsidies in general or not, the OP is specifically talking about Tesla and taken one level further perhaps, could be discussing all EVs. Sure if a company is actually in trouble, which I'm trying to argue Tesla is not, tax dollars can assist in keeping necessary businesses afloat. I don't think Tesla represents something tax dollars needs to keep afloat, not for their product, not even for the amount of people they employ.
On paper. His net worth is tied to Tesla stock, which he holds roughly 20% of. If Tesla stock tanks, so does his net worth.
don't forget that these EV subsidies are also going to the wealthiest households as well.
by this logic, we shouldn't let any business fail. we should just give them taxpayer money to keep the doors open?
in the long run, i want bad companies with poor management or products that are uncompetitive to go out of business. because that's how you get good competitive products and well run companies.
No, it depends on the company/situation. If it's a small/smaller operation absolutely not, but I'm sure that an auto manufacturer employs a lot of people! Then there is the trickle down effect as it impacts all other suppliers, local and broader. A company that employs a large percentage of the local population, suddenly out of work, is going to have a negative impact on the local economy. We can argue about that companies piss poor management at another time (trust me, I'm in first hand with this place), but innocent people just doing their job, suddenly not able to afford to live...
Sometimes you gotta look past your nose at the bigger picture.
If Tesla can't run the factory anymore, what happens to those employees? They're out of jobs, be it all at once or in progressive layoff's/RIF's. Most people don't live with big, cushy savings accounts to bolster them. Without another job, what little they do have gets depleted... When they can't pay their mortgages, what happens to the local real estate? What happens to the property values?
While this is a little extreme of an example compared to Tesla for a myriad of reasons, think of Detroit. What happened once the auto industry tanked?
oh so you just want to support big corporate conglomerates and protection them from facing actual market competition from their smaller competitors? how will mid tier company ever win and take market share from large junker if you keep demanding taxpayers bailout large junker?
no good comes from a trickle down effect of rewarding crappy businesses. it doesn't matter if they are large or small. i would rather take the short term negative impact of a large company falling apart than the long term worse impact of reducing my standard of living through heavier taxation to reward an uncompetitive business that will over time just get worse and worse if you allow this.
"innocent people just doing their job, suddenly not able to afford to live"
it's not like we don't have a social safety net in this country, and 1 year of tougher living for them is better than decades of shittier living for all, even if you argue well, it's just a little shitty taken from everyone so, you know, deal with it. but all that shit adds up.
besides, if this company was making something that needed 50k people to make the thing, then isn't that thing still heavily in demand? doesn't somebody need to step in and make it? depending on why they went out of business, isn't there a decent chance someone else hires a chunk of this workforce to meet the demand of all the widgets they now have to additionally make?
the good arguments for bailouts are few and far between. and one would hope the taxpayer always make out better on the end ie. the bailout functions as more of a loan that the government makes at least a small profit on in the end. vs. just money shoveled into someone as a gift or a loan where we don't get it all back.
why don't you care about the mortgages of the employees and mom and pops? isn't my ability to pay the mortgage in the face of a burden my problem to solve anyway, and not my employer's, and certainly not the government's?
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