Today the federal government will allocate another $2 billion to the “cash for clunkers” program. The first program budget of $1 billion was expended within the first few days of the program hence the addition funding. We won't get into the federal government's ability to forecast and manage a budget in this entry. We'll save that one for another time!
This “stimulus” plan (formally named by the Obama administration as the Car Allowance Rebate System – CARS) is designed to enable owners of older vehicles to “purchase-up” into a new car with better gas mileage ratings. To help consumers the federal government will subsidize the purchase with a grant of $3,500 to $4,500 provided the purchase in made between 7-1-2009 and 11-1-2009. The older vehicle must be totally destroyed and the new vehicle can cost no more than $45,000.
We've got a better idea for an economic stimulus program – a “Cash for Web Site Clunkers” program. Unlike the the vehicle plan ours' would subsidize an asset that truly creates wealth as opposed to being a total liability. The web site cash for clunkers (we could call it WARS, Web Site Allowance Rebate System) would generally improve American business' online visibility and worldwide commerce thereby increasing Internet-driven revenue and government tax revenues. As opposed to the CARS program which is essentially helping only one industry the WARS program would help all industries including the web design and development industry. Here's how it would work.
Businesses with a web site that is 5 years or older, that is built in frames or some other antiquated programming language would apply (online we suppose) for a web site replacement grant (WSRG – government-styled acronym) with a maximum amount of $4,500 (like CARS!). Following a review by what is sure to be a government e-commerce czar (got one for everything else) a grant approval would be made and the web site owning company would be “matched” with a designer/developer within their area. So far so good?
Now, rather than trash the old site as they do with the older vehicles in the CARS program (waste of money), the soon-to-be replaced site would be donated to a start-up or other business that it struggling. The $4,500 grant would be used as a down payment toward a new web site that would cost no more than $45,000 (not $18 million like the government's redesign of www.recovery.gov) and part of the total expense may include search engine marketing, e-commerce, social networking or other functions to drive site visitors. The new site would have to be built within a six-month period and would be required to have a Google page rank of at least 3.
The WARS program return-on-investment for businesses and the federal government would be markedly superior to that of the CARS program. A well-developed and marketed web site should create an ROI of 10:1 or better (at least that's what our clients gain). With government grants totaling $3 billion (as with CARS) the ROI would be roughly $33 billion ($3 billion direct and $30 billion commerce). With corporate taxable income rates at 35% (and growing under the current administration) the federal tax revenues would be $11.55 billion in year one and $10.5 billion for years two, three, etc.
Now mind you, the web site design and development industry doesn't have any lobbyists and no one in government has mentioned that our industry is “too small to fail” so a WARS bill will be a battle. Additionally, our industry has not received any stimulus or TARP money and it is unlikely the Obama administration will want to own our companies as they do GM and Chrysler. Finally, we don't have a union. However, we feel a WARS program is the right thing to do for the economy and American business so please call your congressperson. Actually, don't bother as they are on vacation planning a vote for their next raise. We'll just send a quick note to President Obama and Acorn and we'll let you know how we do. God Bless America!