Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Feb 3, 2012

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In wake of the GOP’s efforts to eliminate the renewable energy production tax credit and money-back rebate for those who take out auto loans for electric vehicles, the conservative party is pushing to improve the nation’s gas-consuming automobiles.

 

Rep. Dan Lungren (R-CA) introduced new legislation that will offer a $1 billion prize to the first U.S. auto company that sells 60,000 gasoline-powered cars that get 100 miles per gallon, as reported in a story on the congressman’s website.

 

The theory behind Lungren’s proposal is rooted in the old practice of incentivizing the nation’s producers to innovate and invent new technology by offering prizes. Other proponents of such a practice include NASA, the Defense Department, and the Obama administration, who recently offered a $1 million cash price for the development of new ways to commercialize technology.

 

But never has there been a $1 billion prize offered by the government for technologic innovation.

 

If Lungren’s proposed bill is passed, it could create a domino effect of economy boosting behavior. Car loan financers would not only experience a morale boost, but they would also soon be saving a substantial sum of money at the gas pumps. American auto manufacturers would receive a lot of domestic attention—and likely spark more business internationally as well. And finally, spending would increase by both big businesses—as development begins and manufacturing continues—and the individual—as new products are made available to them.

 

More car loans would be taken out, lending would hopefully increase, and the our wounded economy might just receive a push in the right direction.

 

However, $1 billion is no trivial amount of money. During a time when the government is being pressured to reduce spending, $1 billion offered to an industry taxpayers have already bailed out will certainly not go unnoticed.

 

But as President Obama presented the nation with great news about the auto industry in his recent State of the Union address, this may prove to be yet another outlet for our domestic vehicle manufacturers to shine in—and in doing so, reduce gas prices for auto loan borrowers across the nation.