President Barack Obama has been taking aggressive steps to put Americans back to work and create “an economy where hard work pays,” according to Obama’s campaign website.
In a speech featured on NPR, Obama proposes measures to encourage longterm economic growth. Unfortunately, his policies do not always live up to the hype.
Economic growth has been a hallmark of the Obama campaign. Too bad his Corporate Average Fuel Economy (CAFE) regulations are going to price about 7 million lower income consumers out of the car market. This number comes from a study by the National Automobile Dealers Association (NADA) released on April 13.
Thinking about the cost of buying even a used vehicle in the current market chills me to the bone. These new regulations leave me strongly considering the benefits of remaining an avid pedestrian for the rest of my life. In order to raise the minimum average vehicle fleet fuel efficiency to 54.5 mpg, the price of cars and light trucks is going up by $3,000, according to the same study. The intent may sound genuinely good at heart, but it has a steep price. It may be smarter to invest in a new pair of walking shoes.
Obama pushes the CAFE regulations forward because it will supposedly save families $8,000 at the pump per year. This claim was made during Obama’s speech last week at a North Carolina truck manufacturing plant. Try, try again, Mr. President.
Luckily, Obama did try again and corrected his gaffe, according to The Washington Post. He corrected the span of a year to over an extended amount of time — he neglected to say how much time. However, to save $8,000 in gas, you would have to spend $16,000 on fuel first.
The average family in the U.S., however, spends a little more than $3,100 on gas annually, according to the Consumer Federation of America. As a result, these new consumer regulations are going to save the average American family a little more than $1,600 a year. That is nothing to turn your nose up at, but it is a far cry from the original number that was promised.
These future savings hold no hope for the 7 million consumers that will be priced out of the market. Buying a car with money that you do not have is not fiscally responsible. If you want to argue with this, look at how many homes were foreclosed on last year. According to MSNBC.com, it was more than one million. This high number was, in part, due to individuals buying houses outside of what they could afford.
Increases in fuel efficiency might be useful for higher income individuals who can afford an initial price increase in regard to a new vehicle. But future savings in gas will not help with the initial purchase of a new vehicle for lower income individuals — especially for
college students who are paying off student loans.
The way that these regulations are going, it might be more environmentally friendly and cost effective to be a pedestrian. When it comes down to it, $3,000 could buy a lifetime supply of shoes. Good thing that these boots were made for walking.