Again, no it doesn't. As Rolo hints, it's a debt game at the federal level. Until that stops, it's all just funny money. When that stops, then we can talk about prioritizing and stop looking at this as "gov't must spend on everything under the sun and gov't income from taxation must remain monotonically increasing".
Please learn Modern Money Theory if you haven't already. You're almost there!
The real key is that the government prints money. ALL the money. The government has to print the money. If the government doesn't print enough money, private banks will print the money, and that leads to a complicated series of disasters which I could explain given enough time, but suffice it to say that 2008 and 1929 are examples of what happens when bank-created money, considered "just as good as government money", is suddenly NOT considered just as good as government money. (That's specifically what triggered the 2008 crash: "money market" funds suddenly not being as good as money, overnight.)
What matters most is real resources. Money is a sort of lubricant so that we don't have to arrange horrendously complicated barter transactions. It's vital that the government keep printing additional money to keep the economy greased. In order for the economy to grow, more money needs to be added -- newly printed money. You can tell you've got too much money in circulation when inflation starts to get bad.
You always want *some* inflation, though, because you want to discourage people from hoarding money -- you want them to spend it now on useful things (like building factories) rather than socking it away in savings accounts or under mattresses hoping it will be worth more later (which happens with deflation). So the amount of money in circulation needs to be monotonically increasing.
The government usually *loans* money into existence so that the money can be taken back if necessary to fight inflation. But the government needs to *spend* some of the money into existence rather than simply *loaning* the money into existence because it's vital to get money into the hands of people who "aren't creditworthy", so that *they* can participate in the economy too. Otherwise they're excluded and the economy shrinks. (Which is ongoing right now.)
Taxation is used to pull excess money back *out* of the economy to avoid hyperinflation (and to make the money valuable -- it's valuable becuase you can pay your taxes with it...). It should be targeted at (a) people who are doing bad things, like polluting; (b) people who have so much money that they're bribing Congressmen with it, who need to be unable to do that; and (c) other people with money, *if necessary*.
On the other hand, if taxation is used to tax the poor (who don't have any money to pay the taxes) and spending is used to give more money to the rich, then the process is usually economically debilitating. An exception are the very few rich people who, like Elon Musk, dump ALL of their money directly into productive investment into creating new, highly useful real resources like factories. Most rich people do not do this.
The government "debt" is a phony; it's not really debt. We could get rid of it tomorrow by printing $100 or $1000 bills to "pay it off" with and nothing much would change economically. It's only "debt" so that the government can provide the *service* of giving interest-bearing Treasury bonds to various people and financial companies who find such things useful.
That's a brief summary of how money works. This isn't how most people think about money, unfortunately. It isn't how most politicians think about it, either. (*cough* Exceptions include Bernie Sanders, who's hired an MMT expert as his main advisor.) But it matches the real world.
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And when a bunch of manufacturers cars are $7500 cheaper than Tesla because they are still getting the credit? How well will Tesla be doing then.
This does mean that every other manufacturer will have an advantage over Tesla for a while. Tesla's correct response? Make sure the market is so large that the other manufacturers -- the ones who still get the $7500 credit -- cannot saturate the market and force Tesla out. If Tesla is generating sales of 500K/year, I think the other manufacturers would be hard pressed to outcompete Tesla given that the credit phases out after the first 200K vehicles. If Chevy sells 30,000 cars per year it should be insignificant; if Chevy sells 200K/year its credit should disappear in the first year and then they'll be on an even footing with Tesla.
It makes it even more critical for Tesla to expand the market for its electric cars ASAP.
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Instead of increasing the 200k cap, we should petition for a total pool of one million EVs on the road.
This (or even a total pool of 10 million EVs on the road) does make more sense than a per-manufacturer limit.
