Start with a car that is already in the news and for some reason has turned into a political hot button. Something like, say, the Chevy Volt. Then, make up a completely bogus number about how much each one costs taxpayers and put it out there. Get Drudge involved. Sit back, relax and see your nonsense spread like wildfire.
This is exactly what James Hohman, the assistant director of fiscal policy at the Mackinac Center for Public Policy, did recently. You may have seen the headlines: "Each Chevy Volt Costs Taxpayers $250,000." "Are Volts for dolts? It's starting to look that way." "Report: Every Chevy Volt has over $250,000 in government subsidies." When we first saw this story, we looked it over and figured the math was so skewed that no one would dare repeat it. But then everyone did, so we now think it makes sense to throw some cold water on the whole issue.
Fact: Each Volt does not – emphatically not – have $250,000 in taxpayer subsidies in it. The way that Hohman got to this figure is by taking the amount of state and federal assistance used to make the car (through loans to build or update manufacturing facilities, for example) and then divide by 6,000. Why 6,000? Because that's around how many GM has sold thus far. It's actually 6,142 for 2011 as of the end of November, but exact numbers are not Hohman's strong suit. It's only by ignoring the fact that the government money spent in getting the Volt to market will influence way, way more than 6,000 units that you have a case. But this is not what is happening, and Hohman should know as much.
Thankfully, some voices of reason have spoken up to clarify the issue, and we wanted to join that chorus. We can only hope that the smackdown spreads as quickly as the hyperbole did. Anyone want to bet on this happening? Didn't think so.