Chrysler will soon be offering no interest loans for prospective car buyers around the country.  No interest loans have, in the past, helped struggling US automakers compete by slightly improving sales.  The only problem with this new plan is that you are paying for it.  This is just another instance of the American tax payer taking a ride, something that has been happening at an alarming rate lately.  The treasury has already cut a 1.5 billion dollar check for Chrysler so they can offer this new round of loans according to Bloomberg.com:

The aid from the bank-bailout program lets the finance company help boost sales at Chrysler, which was rescued from collapse by $4 billion in U.S. assistance. Chrysler U.S. sales plunged 30 percent last year, the most among major automakers. Industry deliveries slid at least 27 percent in each of 2008’s final four months, in part because of a credit crunch.

“Chrysler’s sales were down 53 percent in December,” said Tracy Handler, an analyst in Troy, Michigan, for economic forecasting company IHS Global Insight Inc. “With more money to lend, sales probably would have been down 30 percent.”

I can’t say that I am too happy with this latest round of “saving the big three car companies.”  When you are forced to have the government subsidise loans for a car maker you are really stepping into some dangerous waters.  This is the kind of thing that a communist country would do…not a free market one.  We are, in effect, paying Chrysler to make cheaper cars for the world to buy. 

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