Assignment First


由于金融危机,许多国家的经济状况都有所下降。在商品和服务投资显著下降后,经济面临更大的压力。在收入较低的国家,汽车行业的数千个工作岗位面临危险(Aldred and Tepe, 2011)。

汽车报废计划在缓解危机的情况下是一个非常好的计划。这一计划可能有利于激励人们即使在经济衰退时期也不要减少支出(Yamamoto, Madre and Kitamura, 2004)。这可能有点冒险,因为有可能将经济推入更严重的衰退,但另一方面,如果这项计划得到积极对待,而不是鼓励人们消费,这将有助于更快地恢复经济。在危机时期,建筑业也采取了类似的做法。许多公共建设项目已被撤出,这些项目在危机前就已关闭,目的是帮助建筑行业避免陷入低迷。即使这个方案也运行得很好,但在这两个方案之间,有一个根本的区别(Brand, Anable和Tran, 2013)。建设项目涉及基础设施和公共建筑,这是不可避免的,而且可以肯定的是,它无论如何都会得到实施。


在我们的例子中,我们可以看到的是,在把钱花在汽车行业补贴上之后,汽车行业将从中受益。然而,我们看不到的一点是,同样的钱可以用于基础设施或教育(Huang et al., 2014)。政府为这个目的投资所采取的步骤是非常错误的,因为同样的钱可以用于其他一些有用的目的,如建筑工人或教师。我们看不到的代价比我们看到的好处要高,这就是实际情况。

工会认为,如果这个行业得不到支持,将会有大量的工作岗位流失。在短期内,这项计划根本没有好处,因为它没有提供工作保障。需要记住的主要事情是,汽车工业并不是高度自动化的,但路上只有很小比例的汽车,实际上是在同一个国家生产的(Brand, Anable and Tran, 2013)。这就是为什么出现了一个问题,该计划是否在就业保护?

旧车报废计划在中期和长期都毫无益处,因为该计划不能为汽车行业的工人提供工作保障。需要消费者大量投资的商品,如汽车,并不经常购买。这是2009年发生的事情,当时很多新车被毫无目的地购买(Huang et al., 2014)。此外,购买这些汽车的实际需要是在一两年后。旧车换现金计划结束后,将不会有任何激励措施,汽车销量将很快下降。人为形成的峰值自然会引发随后的低水平。政府使用的资金并没有解决问题,而是推迟了未来几年要解决的问题,这不是政府所采取的正确步骤。


The economic situation of many countries had declined because of the financial crisis. The economy faced more pressure after the investment on the goods and services significantly went down. In the countries where the incomes were, low there was danger on thousands of jobs in the automobile industry(Aldred and Tepe, 2011).
A car scrappage scheme is a very good scheme in the situation of crisis mitigation. This scheme could be beneficial to motivate people not to reduce their spending even in the times of recession(Yamamoto, Madre and Kitamura, 2004). It could be little bit risky as there are chances to drive the economy into an ever-deeper recession but on the other hand, it this scheme is taken positively than it would help to encourage the people to spend their assents, which would help to recover the economy more quickly. In the times of crisis, a similar approach has been taken in the building sectors. Many public construction projects have been pulled out which were shut down before the crisis with the aim of helping the building sector to prevent from the downturn. Even this scheme also worked very well but between the two schemes, there was one fundamental difference(Brand, Anable and Tran, 2013). The construction project was concerned with the infrastructures and public buildings, which were unavoidable, and there was surety that it would have been implemented anyways.
The decision taken by the government and municipality to implement the scheme into action at that specific moment was very outstanding because it turned out to be very effective in counterbalancing the economy, which was going down(Yamamoto, Madre and Kitamura, 2004). The unavoidability of, for instance, road maintenance is not comparable with a need for subsidies in the automobile industry. The argument that these subsidies will indeed help the economy and employment is not sustainable. During the economic downturn, there were high unemployment and loss of potential because of insufficient aggregate demand. According to Keynesian economic theory, this needs to be addressed by government policies aimed at increasing aggregate demand and hence increasing economic activity and employment. Putting the subsidies into something useful or not is not important as admitted by Keynes. The building sectors helped in providing employment, which is great for the economy, but other than production, there was no other use. During the warfare, the same thing applies in which it stimulates research, development, and increase in the arms industry, which helps in the increase of employment. In this argumentation one thing should be clear that we must keep in mind not only what you can see but also what you cannot see which is based on an economic phenomenon called the parable of the broken window.
In our case, what we can see is that the industry will be benefited after the money spends on subsidies to the automobile sector. However, the point, which we cannot see, is that the same money could be used for the infrastructure or education(Huang et al., 2014). The step taken by the government in investing their money for this purpose was very wrong because the same money could be used for the some other useful purpose like construction workers or teachers. The costs of what we cannot see are higher than the benefits that we see, this is what actually happens.
It was argued by the trade union that if the industry were not supported than there would be a huge loss of jobs. In the short term, this scheme was not at all beneficial, as it did not provide job security. The main thing, which should be kept in mind, is that the motor industry was not highly automated but there were only small percentage of cars on the roads, which were actually produced in the same country (Brand, Anable and Tran, 2013). That is why there arises a question whether the scheme in job saver or not?
The scheme of car scrappage was not at all beneficial in the medium as well as in the long term because this scheme does not provide the job security for the workers in the automobile sector. Goods that require a major investment from consumers, such as cars, are not bought very frequently. This is what happened in the year 2009 when many new cars were bought without any purpose (Huang et al., 2014). In addition, the actual need of purchasing those cars was after a year or two. There would be no incentives after the scheme of car scrappage would runs out and the sales would go down very quickly. An artificially formed peak naturally provokes an ensuing low level. The money used by the government did not to solve the problem but they postponed the problem to be solved in the coming years, which was not the right step taken by the government.