A Better Idea: Scale-Back the Auto Industry Bail-out,and Make the Interest on New US Automobiles Tax Deductible

I am resigned to the the fact that the US auto industry may be in such dire straights that the only way to avoid complete collapse is through some level of government bailout. However, a pure bailout has one major flaw. It won't address the fundamental problem: people aren't buying enough US automobiles. As an owner of three foreign made vehicles, a Toyota Prius Hybrid, a Toyota Highlander Hybrid, and a Toyota Tacoma light truck, I think understand why. For the longest time, US cars have been the less fuel efficient, less reliable alternative. That said, there are indications that the Big Three US auto makers have improved the reliability of their products, and have finally made big strides in adopting more fuel efficient designs, in some cases by licensing Toyota's hybrid technology. In fact, Chevy is slated to begin selling an all electric car, the “Volt”, in 2010. These are all promising developments that argue for trying to help the US auto industry until they get their houses in order. But, if we do provide bailout, we will have even more incentive to help make US made vehicles more attr term.

One idea would be to give consumers a bigger incentive to buy American cars by making the interest on new car loans on US manufactured vehicles tax deductible much like the mortgage interest on your home. An incentive such as this would likely increase sales of American made vehicles and would also provide relief to the financial industry who will make increased profits on the increased number of auto loans. And, if you are worried about helping decrease overall gas consumption, you could even limit the deduction to only those US made vehicles that get more than 20 mpg. A limit of this type would provide added incentive for consumers to buy more fuel efficient US vehicles.