The Cash for Clunkers absurdity has been hailed as a huge success — because the government got it precisely correct and showed that when it comes to its area of expertise, no organization in the world can beat it: wasting money.
The first billion bucks ran out just four weeks into the program, and now the government wants to hand out yet another $2 billion — for no purpose whatsoever other than sending the US trade deficit out of control. Or rather, even more out of control. Despite the “huge success” of the cash for clunkers, most of the cars getting bought are rumored to be imports. I say “rumored” because the government has refused to release the statistics. Whatever excuses the government comes up with, we all know that this administration in particular is keen to release anything that looks like good news asap.
But what’s particularly stupid about this program is that the “clunkers” that are traded in — typically 7-10 years old — are required to be roadworthy vehicles. Try turning up at a dealer with a 30 year old rust bucket and trading THAT in. Not a chance.
Instead, the taxpayer is forking out $4,500 to destroy a perfectly good $4,000 vehicle. If this were private industry doing the same thing, the cars would be exported to Mexico and South America where it’s perfectly acceptable to drive a 6 year old SUV. The tax payer would save about 2/3rds of his cash AND the US trade deficit would be less out of control.
Unfortunately for the taxpayer, he doesn’t actually have representation on capitol hill. All he gets is a single vote every few years. The auto industry of course has a bunch of lobbyists who tell congress how to vote — every single day.
And if that wasn’t enough, the cash for clunkers program is going to increase third quarter GDP numbers thanks to all the work required to destroy perfectly good cars. The other number, GDV (gross domestic value) will take a modest his — around $3 billion worth, or $30 per US family. But this isn’t a published number, so it doesn’t actually register with most politicians.
It doesn’t register with most US families either, given that 26 trillion of their wealth — $87,000 per family — has been put at risk since the start of the financial crisis. Heck, what’s another $30 anyway? That’s just half an hour’s wages for those poor auto workers who own GM! Oh, and if you were asking about the budget allocation for this money, it comes from the Department of Energy’s loan guarantee program, a $6 billion fund (now $4 billion) to support clean energy projects.
See! Destroying cars is now a clean energy project. What do you mean a “Waste of money”?
