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Tesla Model S  (Source: Tesla Motors)
Let the money flow...

The federal government seems to be quite happy with dishing out money for environmentally friendly ventures, and there are plenty of companies that are willing to take the funds and put them to good use. One such company is Tesla Motors.

Tesla Motors is probably most notable for its sexy all-electric Roadster. The $100,000+ sports car, which is based on the Lotus Elise chassis, has a driving range of 244 miles – one Tesla Roadster, however, was able to travel 313 miles on a single charge -- and can zip to 60 mph in less than four seconds. However, Tesla is looking to take its electric car-building prowess to a somewhat more mainstream audience with its four-door Model S electric sedan.

This is where the federal government steps in to work its magic. According to the Detroit News, Tesla Motors today closed on a deal to secure $465 million in low-cost loans from the Energy Department. The funds will be used to build manufacturing plants in California for the Model S and its powertrain.

The company was originally approved for the loan back in June of 2009. The $465 million will come from the Advanced Technology Vehicle Manufacturing Program which is providing a total of $25 billion to automakers that develop new fuel efficient vehicles. Other notable names to get in on the loans include Nissan ($1.6 billion) and Ford ($5.9 billion).

"This is an investment in our clean energy future that will create jobs and reduce our dependence on foreign oil," said Energy Secretary Steven Chu.

"It will help build a customer base and begin laying the foundation for American leadership in the growing electric vehicles industry. This is part of a sustained effort to develop and commercialize technologies that will be broadly deployed throughout the American auto industry."

As previously reported by DailyTech, the Model S will have a driving range of up to 300 miles and can dash to 60 mph in 5.5 seconds. The fetching sedan weighs in at a portly 4,000 pounds (1,200 pounds of which comes from its lithium-ion battery pack). If all goes according to plan, the base Model S will cost around $50,000 after a government-backed $7,500 tax credit is taken into consideration. For comparison, the Chevrolet Volt is expected to cost in the “low 30s” after the $7,500 tax credit is applied. At that price point, GM still contends that it can make a profit.

The Model S is scheduled to go into production in 2012 and yearly output is pegged at 20,000 units per year.



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RE: clue me in on this...
By msomeoneelsez on 1/22/2010 8:18:57 PM , Rating: 0
Republicrats are all bad. Its a fact.

"And do you have a source for the stimulus packages not fixing the economy at all?"

Does common sense work? Hows about hundreds of years of economic knowledge? Maybe even the obvious effects of inflation? Possibly the mountainous amount of data showing that freer economies with lower government intervention and less taxation tend to do much better than less free economies?

And no, we do NOT have capitalism in America right now, and no, the markets are not free. There is too much regulation, too much of government picking winners and losers with our tax money.

So, let me explain the economics of the stimulus...

government has no resources of its own
--> taxes must cover all stimulus funds
--> if taxes cannot cover all expenditures of government, then either a) funds are printed, or b) loans are taken from other countries or from within this country itself. Both are a creation of funds, as loans create dual allocation of funds as well as including interest which must be covered by either printing funds, or taking taxes, and inflation directly increases the supply of money.

If taxes cover it;
Then the private sector is deprived of funds which individuals use to buy things that they need or want most, from the companies that provide the best value for the products or services; in other words, consumers tend to buy from the most efficient producers.

Government, on the other hand, must choose who to fund. As has been shown time and time again, this produces inefficiencies, and does not allow for competition to work correctly.

Therefor, conclusion 1: Taxation for stimulus funds is a net loss for efficiency in the markets.

If creation of funds pays for stimulus;
Then the supply of money increases, which in a time of recession (a lowered velocity of money, i.e. people are spending less, earning less... funds are transacted at a lower rate) is absolutely unavoidable to incur inflation, UNLESS a simultaneous destruction of money is incurred, as was seen by loan defaults in this latest mortgage crisis.

Inflation, in case you did not know, is a devaluation of currency; you can buy less with each dollar. This means that savings accumulated over time is devalued. This means that prices go up. Inflation is like a hidden tax on everyone. Inflation only does bad things to economies.

Therefor, conclusion 2: Creation of funds for stimulus funds is a net loss for efficiency in the markets, and it is a redistribution of wealth away from those who save.

This is not to say that stimulus funds do not have a good (very) short term effect on economies, as an increase in the velocity of money can "jumpstart" certain segments of the economy, but when governmental projects are beyond what is necessary, the government is doing much more harm than good.

If you wish to believe that more government action is a good thing even after reading through the very reasoned (and quite well supported -- just do a little research) arguments against more government action, then you are simply denying what has proven throughout history to be a self-evident truth. Free markets work better than government controlled markets.


RE: clue me in on this...
By msomeoneelsez on 1/23/2010 3:01:18 PM , Rating: 2
Wow, really?? Rate me down for explaining simple economics about why the stimulus is a bad thing? I even acknowledged the short term effects which actually are good. Some people, man...


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