There has to be more to it than participating for the purpose of winning new business, enhancing customer service, providing offers and notification via inexpensive channels, disseminating press releases and general promotions, managing brand and reputation, creating awareness, promoting your knowledge experts and competitive intelligence, right?

Well, there is another reason, albeit often overlooked, for joining the social fray. We can use various social sites and services to bolster off-site search engine optimization (SEO). This is possible because search bots are constantly crawling popular social sites, and in some cases even paying for direct access to the data, in order to provide real-time user-generated content to their users.

We can use this increased awareness of new content by putting our articles and links where the search engines are most frequently crawling. This is especially helpful during initial site launches or after a period of your site’s prolonged inactivity. If you haven’t updated your website in six months, Google is likely to find and index your new content faster via a social bookmark, Facebook page, Twitter profile or RSS feed than it is via a link buried on your website.

To understand this better, it helps to think of your site as having a search bot crawl rate and crawl budget. The crawl rate simply indicates how often the search bots are willing to come back to your site, which of course is to some degree dictated by how frequently they encounter new content when doing so.

The crawl budget would be an indicator of how much time, per visit, they are going to spend investigating new content they do find. The latter seems to surprise people, as they often assume that Google, for example, will stay and index everything that you have changed every time.

The problem is that the search bot most likely didn’t schedule to index hundreds of new pages on a visit where they rarely see one new page.

Now, for the final incentive for putting this all in motion: as you re-distribute content to these off-site social media sites, you are creating backlinks to your pages.

Backlinks are simply when a site or page other than your own links back to yours. This is one of over 200 signals Google looks for in determining the placement of your site and its pages in search engine result pages (SERPS).

Note that I mentioned backlinks going to pages, not the site. It is important for backlinks to not only go to your root domain name, but to also go directly to pages within your site that have keywords and subject-relevant copy. After all, when someone performs a search query, they want to find a page containing the information related to those keywords.

Using social media for search engine optimization can be as simple as automatic distribution of the content to the social sphere or it can be based on an internal methodology for new content distribution.

The effectiveness and time investment will largely be dependent on how competitive the keyword terms are that you’re trying to rank in and how active your competitors are.

Get started with these simple steps:

• Make sure your company Facebook page and Twitter account are kept up to date with links to new posts on your website.
• Encourage employees on LinkedIn, Facebook, Google Buzz, and Twitter to promote links to new content on your website.
• Create a company Google Profile page and use anchor-text-laden links back to key sections of your website.
•  Create Twitter lists related to your industry and add them to Listorious. Then make sure links to your site appear in those lists.
• Add all your social accounts into an aggregator like FriendFeed.
• Use social bookmarking sites like delicious, stumbleupon, yahoo buzz, etc. to bookmark new posts.
• Add your RSS feed to sites like tumblr, netvibes, pageflakes
• Use Google Webmaster console to monitor your crawl rate.

In my next article, I will tackle social media optimization and how to manage social media effort and time.

The quality administrators will begin to take a stand and live for the long run, not the quick and easy business with little substance. Administrators that write contracts that don’t meet customers’ expectations or that are filled with loopholes to avoid payment have given our industry a black eye.

Products that are written with the intent not to pay a claim tend to be cheaper products and will only cause each and every administrator trouble in the future. These products drive poor CSI, upset dealers and ultimately cost everyone more money.

A product should be written in the same way that the F&I manager is going to sell it. The long-term CSI and the protection of the customer and dealer should be the most important components of the product.  Let’s take a look at a few examples that are potentially harmful to a customer and a dealer, ultimately leading to the agent and the administrator receiving the “black eye”:

Service Contract Refund Programs – Time Only

How the F&I manager sells it: “The best part Mr. Customer is that if you never use your service contract, we will give you 100 percent of your money back.”

What the customer heard: “If I don’t use it, as soon as it expires, I get my money back.”

The reality: With Time Only refund programs, customers have to wait until the contract expires by TIME. So, if they were sold a 7-year/100,000 mile program (most popular) and customers drive 100,000 miles in five years, they have two choices: (1) keep their car another two years and not trade it (not good for future car sales) waiting for the contract to expire by TIME or (2) take the hit and not get a refund.

With the second choice, the customer is mad and the dealer has to either eat crow and refund the customer or lose the sale. Both options are horrible for the dealer and the customer.

Tire and Wheel Road Hazard Programs – Without Curb Damage

How the F&I manager sells it: “The best part Mr. Customer is that if you ever have a flat tire or damage to your rim for whatever reason, this program will repair or replace your tires and/or rims at no charge.”

What the customer heard: “Everything is covered, even if I hit a curb.”

The reality: Tire and wheel coverage that does not cover curb damage ends in disaster for everyone involved. More agents have expressed their frustration with this product because they end up paying these claims out of their pocket or their dealers have to pay out of theirs. Why not just sell your dealers on why they should have a slightly higher priced product that does what the customer perceives it to do? It should pay for damage, no ifs, ands or buts!

Windshield Programs – Repair Only

How the F&I manager sells it: “The best part Mr. Customer is that if you are driving down the road and a rock hits your windshield, it will be fixed.”

What the customer heard: “No matter how big the crack or hole is, my windshield is fixed.”

The reality: The contract only pays for repairs (usually up to a 6-inch crack). The reality is that very few damaged windshields can be repaired and most need to be replaced. So here we are again with a contract written that doesn’t perform according to the expectations of the customer.

Most dealers and agents become trapped into finding the least expensive 4-and-1 or 5-and-1 “combination” product. Watch out because these are the very contracts that are written one way and presented to the customer a completely different way. Sure, they are easy to sell, but who are they benefiting other than the administrator? Certainly not the customer or the dealer in the long run.

Unfortunately, many products developed with only cost in mind are too early in their shelf life for dealers to have learned their lesson. As administrators, we all need to band together and create contracts that perform according to the perception of the customer and the dealer. Remember the old adage “if it is too good to be true, then it is.” When a dealer or an agent is shopping for the “best deal,” it isn’t always all about cost.

For example, an auto insurance policy for one year will recognize 1/12th of the premium each month for the entire year the policy is in effect. This assumes that one is equally likely to have a claim in one month as in any other.

Of course, for some lines it is more likely that you would have a claim during one season than the other. For example, homeowner’s insurance in Florida would of course see more claims in hurricane season between May and November than the period between December and April. Because the amounts are relatively small, this adjustment is typically ignored.

There is an exception to this rule for policies that cannot be cancelled and last longer than one year. While these products are not considered very common in the overall insurance world, they do make up most of the portfolio of F&I products at a dealership. GAP, VSCs, tire and etch and other products are typically written for a period greater than one year.

Most carriers will earn GAP using a “Rule-of-78s” method. This method was originally used to calculate finance charges before the widespread availability of computer software to more easily calculate interest payments.

The rule will basically be close to interest charges on a loan – in other words, the amount of earned premium for each month is analogous to the percentage of the total interest for a loan payment for that month. The Rule-of-78s does a good job of allocating the total amount of interest to a particular month.

The Rule-of-78s will earn premium as a function of the sum of the digits of the remaining term with the sum of digits of all term values. For example, consider a 60-month contract. The sum of all the months’ earnings is 1,830 (1 + 2 + 3 +4 + ……+ 59 +60). For the 12th month, the earnings would be the remaining months (49) divided by the total (1,830) or 2.7 percent of the total contract.

If the contract were earned evenly (pro-rata), the earnings for one month would be 1/60 or 1.7 percent. You can see that the Rule-of-78s earns more premium at the beginning of the contract.

But is that a good approximation for the exposure on a GAP policy? Remember that GAP will cover the difference between the actual value of the vehicle and the loan balance. At some point, the vehicle value will likely be greater than the loan balance, but the Rule-of-78s will continue to earn premium in these months where there is no exposure – though much less than the earlier months of the contract.

Evidence from claims studies would suggest that, in general, the Rule-of-78s earns premium too slowly. That is, the claims from GAP contracts tend to come earlier in the contract than the earnings pattern would suggest.

Here is a little background on how GAP and other long-term products (such as GAP and VSC) are earned. These rules are promulgated by the NAIC and required for all U.S. insurance carriers.

In general, the unearned premium must be the largest of:

1. The amount needed to refund the policy.
2. The proportional amount of the policy that is unearned.
3. The future losses from all policies.

Our discussion focuses on No. 2 – the proportional amount needed to earn the policy. No. 1 focuses on refunds, which in many cases use the current rules. For accounting purposes, a company may still need to recognize the earned premium using a Rule-of-78s.

No. 3 will usually only be applicable when the loss ratio is high. In this case you need to reserve the expected amount of future losses. For simplicity, there are additional rules that also apply but we will ignore these for our discussion.

Other jurisdictions outside of the United States may require similar rules, as well as GAP accounting.

An alternative pattern that works reasonably well is to shorten the term by 25 percent and earn the premium over the shorter term. The Consumer Credit Industry Association released a GAP study in 2009 that examined a large of number of claims from multiple writers and found this type of approach to be a better fit with claims than the current reserving practice.

In this case we shorten the 60-month term by 25 percent to 45 months. The sum of all the months’ earnings is 1,035 (1 + 2 + 3 +4 + ……+ 44 +45).

For the 12th month, the earnings would be the remaining months (34) divided by the total (1,035) or 3.3 percent of the total contract. As noted above, using the traditional Rule-of-78s will result in 2.7 percent of the premium being earned.

The following chart shows the two earnings patterns side-by-side:

Note that reducing the term by 25 percent is just a technique that fits some books well. Some books will earn faster and others slower.

An earnings pattern should match the emerging claims. For a GAP product, earnings should decrease each month regardless of the earnings method used.

Increasingly, GAP products are offering features beyond simply paying off the balance of the loan. These benefits might include down payment assistance for the purchase of a new car, etc. These types of additional claim payments may also impact the earnings curve. They will lengthen the earnings period if the benefit is flat and not tied to the existence of a GAP (i.e., pays on any total loss whether or not the vehicle value is less than the outstanding loan balance).

There are several implications from a faster earnings curve. First, when customers request a refund, they may be refunded more money than they are theoretically due because more exposure has passed.

For example, savvy customers who realize there is no longer a GAP exposure on their vehicle would be due a refund, despite the fact that all contracts will eventually not have material exposure.

Some lienholders (in particular, the manufacturer captives) and some states require a pro-rata (even refund), which is much more advantageous to the consumer.

However, there are more important implications than refunds. If you are earning the premium too slowly, this distorts your financial results. If the book is growing, the stated loss ratio will be too high. Likewise, for a declining or run-off book, the stated loss ratio for the current period will be too low (though the distortion will be smaller than when the book is growing).

In either case, the inception-to-date loss ratio will be overstated.
For a growing book of business, this distortion may be significant.

Look at the following table and assume that your “true” loss ratio is 80 percent. Also, you have begun a GAP program and are receiving 100 contracts a month for a 60-month term. Each month, the number of contracts received increases by 0.5 percent.

The following table shows the difference in loss ratios:

As you can see, the impact is significant. At one year, your loss ratio would be 24 percent overstated. After 5 years, the impact is still 10 percent.

Of course, one should be careful because GAP is subject to volatile results due to fluctuations in the financing and used-car market. GAP loss ratios will increase when financing standards become more lax as well as when used-car prices fall.

The presence of a few large claims may also distort your loss ratio. But, in general, the actual loss ratio on a stable or growing book of business will be overstated using the Rule-of-78s.

What is the impact? For taxable income, there may be no impact, since you may be required to continue to earn the premium in the usual way. However, for analyzing a book of business the impact may be significant:

• You may take action in a case where merely the earnings pattern does not reflect the true exposure. You may cut back on your writings since you erroneously believe that the loss ratio is poor or take unwarranted rate increases.
• In addition, you may have to establish additional reserves to fund losses if future losses are projected using an incorrect correct pattern. For example, in the case above, a projection of 104 percent loss ratio at 12 months may cause the establishment of additional reserve to cover projected losses. If the correct earnings pattern is used, then no additional reserve is needed.

So in the end, you may be forced to keep two sets of books for GAP business. A traditional earnings curve for statutory accounting and refund processing, and a more accurate curve to analyze the business and project future losses.

The process is changing with the industry’s latest evolution. Warranty Inspection Services’ new inspection technology provides a new level of detailed vehicle data.

WIS’ VeriScan tool includes an OBDii interface unit that is able to access diagnostic information from the vehicle’s engine and power management control unit (ECU/ECM). VeriScan facilitates the encrypted WiFi/cellular transmission of vehicle data and photos, as well as the inspector’s written report, to WIS’ secure servers.

A vehicle’s OBDii data, mandated on all vehicles in the United States since 1996, allows administrators to recognize fraud, answer questions about pre-existing conditions, avoid misdiagnoses of vehicles and aid in the accurate determination of liability.

“Administrators have been asking for a faster process with more detailed, accurate information,” says Chris Rand, co-president of WIS. “They can now access all the information about the vehicle while the verbal report is being given.”

While the inspector is still on-site, the administrator can determine if any photos are blurry, if additional angles should be captured or if other technical issues need to be clarified.

Glenn Gonzalez, director of claims for SRI, says the availability of all the data at once is particularly helpful when there is a dispute. “Our job is to get the customer back on the road ASAP and collecting information from the vehicle helps us get to the correct answer faster. This system makes inspections happen in real time.”

WIS’ pricing structure has not changed with the release of VeriScan. “We don’t think price should be a factor and we don’t want administrators to bring price into their considerations,” Rand says. The company has assumed all the expenses related to the new system.

In addition, WIS provides laptops and the VeriScan system to the inspectors it works with and accepts all liability. Independent inspectors pay a refundable deposit before receiving a laptop, but do not have to purchase any additional equipment or pay any monthly fees.

“VeriScan does not cost inspectors money or expose them to liability,” Rand stresses.

Customers of F&I Administration Solutions and StoneEagle can use their existing software to connect to the WIS system, eliminating the need for a third-party software system.

F&I Admin has integrated inspections from WIS into its SCS Auto VSC platform. The integration includes the ability to submit inspection requests, receive alerts that inspections have been completed and links to completed reports all directly from within the SCS Auto system.

David Trinder, CEO of F&I Admin, expects this partnership to result in significant time saving during the claims process for F&I Admin’s SCS Auto users.

“Our company’s strategy is to connect to all partners that create value and add efficiencies for our customers,” Trinder says.

WIS is now working on an updated version of the VeriScan tool that will include video and sound. Rand says the goal is to make the process as close to a live inspection as possible. “These process improvements are not meant to be window dressing changes, but rather they are fundamental advancements for the industry.”

For the first time in its seven-year history, the conference will explore product categories outside of vehicle service contracts, providing attendees with insights into the industry’s newest vehicle protection products and services. Here’s a look at some of the other hot-button issues on this year’s agenda:

• The Danger Inside the Data: In this session, Tony Wanderon, president of Allstate Dealer Services, will look at how the last two years have impacted the data companies rely on to set their business strategies, and will answer and detail whether historical data can really predict the future..
• The New World of F&I: Today’s Realities and Tomorrow’s Promise: Forrest Heathcott, president of JM&A Group, will provide administrators with an overview of the F&I industry. He will talk about the role of technology and the opportunities available in today’s online marketplace. He also will how demographics shifts among buyers and new legislation could impact the industry.
• Dealership Reinsurance: Scott Allen, president and CEO of Oceanic International, will delve into the world of insurance litigation. He also will address the challenges and opportunities that lie in reinsurance, and will offer his take on how providers can make reinsurance an integral part of their offerings.
• A Customer’s Perspective from Service Directors: Administrators will hear from a select group of service directors and F&I managers on what they expect from providers. These dealer representatives also will provide feedback on what providers do well and where improvements are needed.

Also featured on this year’s agenda are two panel discussions on Web services and the economy’s impact on business. Attendees will hear from panelists about their experiences with Web services for real-time quoting, rating and contract generation, as well as gain insights from a team of experts on the economic downturn’s impact on cancellations and regulatory issues.

Workshops filling out this year’s agenda include: “The Importance of a ‘Bag’ of Products and What Constitutes a Full Bag?” “Controlling the Bad Guys: How to Deal with Players that Abuse the System,” and a limited warranties workshop that will focus on how companies are navigating the host of regulations governing that segment of the industry.

Attendees will also have access to an exhibit hall filled with F&I-related products and services. For more information or to register, visit www.VSCAC.com or call (800) 576-8788.

The application will be branded as the provider’s application. Once downloaded to the mobile device, customers will enter the VIN and other identifying information to register their vehicle with the application. Upon registration, all contracts bought from that provider will be displayed along with relevant coverage details.

This first version will also display a copy of the contract itself, details about covered components, claim history and provider and dealer contact information. More functionality will be built around this core data in upcoming versions.

Attendees of this month’s Vehicle Service Contract Administrators Conference will be able to see the application in action.

“We have always said that as an F&I administration solutions provider, it is crucial that we deliver the latest technologies and capabilities,” said David Trinder, CEO of F&I Admin. “Communication through mobile devices is becoming an integral requirement for most businesses and this part of the auto industry is no exception. Most importantly though, this is just the beginning of an ongoing development process through which we will deliver real-time data via many different mobile devices to all constituents within our customer base.”

This solution is consistent with F&I Admin’s stated strategy of leading the way with the use of the latest technologies and always keeping up with the needs and demands of the industry.

“We have always been committed to using the latest technologies to deliver the best solutions,” said Kumar Kathinokkula, COO of F&I Admin. “We are also linked electronically to nine menu systems and an industry-leading credit card payment system. As with these other capabilities, this mobile application is a continuation of our execution of this commitment.”

F&I Admin’s SCS Auto Platform is specifically designed to support vehicle service contracts, GAP, prepaid maintenance, limited warranty, appearance protection products and more.

Trinder added, “This is what we are about: the tools you need, the connections you need and a system that helps you grow your business and build efficiencies in every way possible.”

As a result of the integration, StoneEagle’s users will enjoy significant time savings and the elimination of data entry mistakes when using WIS for inspections.

“We have been working to develop an integrated module to help our third-party administrators manage outside vendors,” said Brent Allen of StoneEagle Group. “With Warranty Inspection Services’ introduction of VeriScan, we immediately recognized that our customers would want access to this new technology. Any time we can improve accuracy and save time and money for our customers, integration makes perfect sense.”

“Our VeriScan technology offers the first real advancement in the inspection industry since digital cameras became commonplace, and is potentially beneficial to every administrator in the industry. We are excited to be working with StoneEagle to get this new technology into the hands of their extensive customer base of administrators in a smooth, seamless manner,” said Chris Rand, co-president of Warranty IS.

VeriScan is a proprietary tool designed to increase the accuracy, timeliness and thoroughness of inspection reports. VeriScan facilitates encrypted WiFi/cellular transmission of vehicle data (through an OBDii interface), photos, and the inspector’s initial written report to WIS’s secure servers. This system allows the administrator to receive more data and more accurate data faster than previously possible. VeriScan gives customers the ability to see the computer data from the vehicle and to view the written report and photos while taking the verbal report. Any additional photos or report editing required can be completed while taking the verbal report, allowing for clarification of any technical issues, making the verbal report much more accurate.

SEcureARCH is StoneEagle’s third commercially available warranty administration system and combines decades of industry experience with the latest technologies. It is fully integrated and compatible with all of StoneEagle’s other offerings as well an array of other providers.

In a wide-ranging speech on the economy today, Obama said the government’s rescue of General Motors Co., Chrysler Group LLC and their finance arms — along with dozens of major financial institutions — had been deeply unpopular, reported The Detroit News.

“Some of the very steps that were necessary to save the economy — like temporarily supporting the banks and the auto industry — fed the perception that Washington is still ignoring the middle class in favor of special interests,” Obama told a crowd in Cleveland. “And so people are frustrated and angry and anxious about the future.”

Over the last six weeks, Obama has repeatedly touted the success of GM and Chrysler and the saving of more than 1 million jobs in rescuing both companies from collapse and putting them through bankruptcy last year.

Late last month, Rep. Ann Kirkpatrick, D-Ariz., sharply criticized GM and another bailout recipient, AIG, and reiterated that Congress should never have approved funding to allow the automaker to win a bailout.

“They may be celebrating in GM and AIG’s boardrooms, but the taxpayers don’t have much to be happy about. We still have tens of billions of dollars at stake in these companies, and we are still months or years away from getting our money back,” Kirkpatrick said. “This is a perfect example of why government shouldn’t be bailing out corporations.”

Obama also reiterated his push to keep green jobs in the United States.

“We see a future where we invest in American innovation and American ingenuity; where we export more goods so we create more jobs here at home; where we make it easier to start a business or patent an invention; where we build a homegrown, clean energy industry — because I don’t want to see new solar panels or electric cars or advanced batteries manufactured in Europe or Asia,” Obama said, according to a copy of his prepared remarks made available by the White House. “I want to see them made right here in America, by American workers.”

Sitting alongside the company’s chairman and Akerson’s predecessor as CEO, Edward Whitacre Jr., the new GM boss answered employees’ questions, but avoided any talk of the company’s planned public stock offering this fall — under the watchful eye of the company’s top lawyer.

“We need to be on the attack,” Akerson said, according to two employees who watched the event on an internal telecast.

Akerson said the company has improved its balance sheet since its 2009 bankruptcy filing, but now needs to do more.

“The only way to become a great company is to get better,” he said.

The two executives sat in high-backed chairs in the discussion, which was held at the company’s Renaissance Center headquarters in Detroit. It was moderated by Selim Bingol, the company’s chief spokesman.

Akerson, a GM director since July 2009, took over from Whitacre Sept. 1. Whitacre will stay on as chairman until Dec. 31, when Akerson will assume that title as well.

Akerson left private equity firm Carlyle Group as a managing director last month.

He told the GM employees that he helped manage a $167 billion portfolio of investments at Carlyle. Those investments include Allison Transmission, Hertz and Dunkin’ Donuts.

GM spokesman Tom Wilkinson confirmed the essence of Akerson’s comments and that the meeting took place.

“The purpose was to introduce Dan to employees … to have him talk about who he is and who he’ll be as a leader,” Wilkinson said.

He called it “an opportunity (for Akerson) to connect with employees and get a sense of him as a person,” and said the CEO’s message was that the company “is back, the ship’s been righted … and now it’s time for GM to compete.”

The Akerson-Whitacre employee town hall came on an important day in the life of GM’s product line.

In Lordstown, Ohio this morning, the first Chevrolet Cruze compact car rolled off the assembly line.

Ohio Gov. Ted Strickland pressed an inked thumbprint against the roofline of a red Cruze, signifying that the all-new compact was a world-class vehicle produced in the state he leads.

Strickland and GM North America President Mark Reuss drove the red Cruze off the end of the assembly line, followed by white and blue models driven by members of the Cruze launch team that includes United Auto Workers locals 1112 and 1714.

“The rebirth of the U.S. economy starts in Lordstown, Ohio with the Chevrolet Cruze,” Reuss told a crowd of about 2,000 plant workers and several hundred community members who turned out to see the ceremonial start of production. “The Cruze is the finest compact car.”

President Barack Obama is expected to ask Congress to let businesses write off 100 percent of their spending on new equipment through 2011 at a speech in Cleveland today. The president also wants to make permanent the tax break for research and development to encourage more long-term spending.

“The auto industry is one of the leading centers of R&D in all industries — even higher than computers and pharmaceuticals,” Bergquist said. “Making a permanent R&D tax credit sends us a strong signal that we should invest in a lot of the technology. To the extent it can encourage R&D and generate investment, that translates into jobs.”

One effect of the tax credit, experts noted, is that it makes high-paying U.S. research jobs competitive against sending work offshore to lower-cost countries.

The idea behind the tax breaks is to encourage business owners to part with some of the $1.8 trillion sitting in corporate coffers — or to tap the millions in bank capital waiting to be lent — and spend it on everything from new computers to new factories. Companies have delayed spending because of economic uncertainty.

The boost in demand from spending ideally would prompt equipment manufacturers to hire more workers, while the R&D tax credit would encourage other businesses to hire more researchers and engineers.

The proposals come on top of Obama’s call Monday for an additional $50 billion in spending on infrastructure.

The tax write-off for capital spending could matter a great deal in Michigan’s manufacturing economy, said Mike Johnston, vice president of government affairs for the Michigan Manufacturers Association.

“The one thing that’s different in manufacturing, and why it’s good for the economy, is that it takes enormous amounts of capital investment,” Johnston said. “Think of a steel plant or auto plant or cement plant. There are billions of dollars in investment to make those products.”

The question is whether manufacturers need new plants and, even if they do, does a tax break now offset the risk of spending in such a weak economy?

Dozens of auto plants have closed during the industry’s restructuring, and more are scheduled to be shuttered in the next few years. And low consumer demand means manufacturers of other goods — from washing machines to toaster ovens — aren’t running their assembly lines day and night to meet the consumer demands that drives nearly 70 percent of the U.S. economy.

“The idea is that it would be cost-effective for a business to buy some of this stuff in advance of when you need it,” said Dana Johnson, chief economist for Comerica Bank. “But there’s a lot of spare capacity in our economy.”

Still, Johnson said, “We have a pretty sizeable segment in our manufacturing sector that would benefit from this.”

But accelerating spending by pulling future investments forward into today’s economy can have a see-saw effect, such as the big drop in sales that followed government incentives for new cars and homes, noted Peter Cohan, an economic analyst and professor at Babson College in Wellesley, Mass.

“The idea is that the economy needs help now, and the hope is that by the time it expires, regular old private-sector demand will take over and make the economy work,” Cohan said.

With the U.S. unemployment rate hovering near 10 percent, businesses won’t lay out money today and hope to get it back on taxes tomorrow, noted David Cole, chairman of the Center For Automotive Research.

“If we don’t see some potential for growth, I’m not sure how much impact this can have,” Cole said. “The economy is too uncertain right now, and cash is the one thing you can count on.”