U.S. Says Aid to Auto States to Grow in Next 9 Months

U.S. Says Aid to Auto States to Grow in Next 9 Months

Aug. 5 (Bloomberg) -- U.S. help for states hurt by auto- industry layoffs and plant closings will intensify in the next six to nine months, according to the Obama administration official leading the recovery effort.

Michigan, Ohio and Indiana will receive most of the spending, said Edward Montgomery, executive director of the White House Council on Automotive Communities and Workers. The aid will include money for worker training and grants such as the $2.4 billion being announced today to encourage development of hybrid and electric vehicles, he said.

“Our focus is on providing near-term support to help begin the long-term transformation,” Montgomery said in a speech today at an automotive conference in Traverse City, Michigan. “There is no magic bullet for transforming economies.”

Michigan communities are among those seeking U.S. aid after bankruptcies by the former General Motors Corp. and Chrysler LLC helped push the state’s unemployment rate to 15.2 percent, the nation’s worst. GM and Chrysler are shutting thousands of dealers and eliminating jobs.

Aid to develop so-called green jobs and stimulate local economies will also be directed at communities that have lost auto factories in Delaware, California and Missouri, Montgomery told reporters before his speech.

Montgomery didn’t give a figure on how much the government would spend on aid related to the auto industry. He said billions of dollars in U.S. assistance are flowing into auto communities, such as the $25 billion from the Energy Department for development of alternative-fuel vehicles.

States and local communities should help fund the recovery because “the federal government cannot do this alone,” Montgomery said.

The rising stock market and growth in housing starts are “positive signs” the economy is turning the corner, he said.

“We are either at the bottom or near the bottom” of the recession, Montgomery said.
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Biden just delivered the $2.5 Billion TODAY to a company in Michigan to develop batteries for all electric cars.
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The federal government can completely control the future direction of the economy in this way, by subsidizing and funding sectors that fit their agenda and letting the other die a natural deflationary debtor's death.
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