Cash-for-Clunkers, or as Lenin called it, Наличные-за-старье
For the moment, let’s just ignore that the Obama brain trust developed a program that was designed to run for three months but ran out of money in four days, and what that might tell us about their ability to forecast anything about the economy or their ability to administer your healthcare.
Seriously. Let’s just put that aside for the moment, because there are lots of other reasons to cringe at Cash-for-Clunkers.
Far as we can tell, Barack Obama learned absolutely nothing from the failed economic policy Soviet Union, because Cash-for-Clunkers clearly demonstrates central planning at its worst.
What the Obama administration saw as a devilishly-clever way to add another $1 billion (now increased to $3 billion) to the automakers bailout will also have the unintended consequence of distorting markets for years to come.
- By selling cars at artificially-depressed prices, it subsidizes weak dealers who will be able to keep their doors open and compete against stronger dealers.
- By artificially increasing demand now, it will artificially reduce demand in the future.
- By artificially reducing the supply of used cars, It will artificially increase the demand for and price of the remaining used cars.
- By mandating the destruction of used cars, Cash-for-Clunkers will unintentionally distort the market for spare parts and auto repairs.
- By providing what is, in effect, a $4500 tax cut for those who can afford to purchase a new car during a recession, it punishes those who may need help the most.
Ironic, isn’t it, that the same man who appoints so many czars should make the same mistakes as the Russian communists who replaced the czars.
Source: Examiner.com
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{ 7 comments… read them below or add one }
Let’s imagine the same program for the housing problem. Destroy all the foreclosed properties and give the former owners a free down-payment on a new home.
Or one homes which aren’t “green” enough.
There’s only one word for people who come up with programs like this. Morons.
- – - By artificially increasing demand now, it will artificially reduce demand in the future.
In normal circumstances perhaps, but all these people who are buying hybrids are going to be back in the market much sooner than they would be if say, they hadnt bought a worthless piece of shit hybrid.
An astute observation, R.W. We bow to your superior powers of reasoning.
WSJ: Nearly everyone now seems to be praising “cash for clunkers ”…REALLY, SAYS WHO? http://is.gd/20FGH
Obvious to any thinking person is that the government did not do this to stimulate the economy, there are much better ways to do that. They did this for one reason only, their obsession with the hoax of global warming.
9 out of 10 of the “clunkers” are turning out to be old trucks, and my guess is that these old trucks were not the primary vehicles in families, but rather “the old truck” that they just kept around. And those types of trucks are hardly driven. So now, you and I are paying through the nose, to help our neighbors yank those trucks out of the driveway, and then coercing auto recyclers to take them (not much profit in them since we must wreck the drivetrains), burn fossil fuel to take them apart, crush remainders, and transport them to whereever crushed vehicles go to die.
And all this so that we can trade them in for what I’d bet my life are mostly Japanese cars.
The symbolism is too great to ignore. Americana–in the form of American trucks–destroyed, and replaced by Asian cars. Aren’t these (mostly) democrats that came up with this oh-so-brilliant idea, the same ones that scream for us to keep jobs in America, and vilify Wal-Mart for selling Chinese goods?
From what a friend has told me, he’s some some very nice vehicles turned in, some that I would be quite willing to pay the owner $4500 for, esp some of the trucks.
Many of them are in excellent condition, with plenty of life left. It is incredibly sad to see so much waste. It boggles my mind to think they are purposely destroyed & made useless even for parts.
I think the last point in the post exposes exactly what this scam is. It’s a tax cut for people who still have jobs, and those who can afford to take on a few hundred dollars a month in car pmts & higher insurance. It’s useless for someone on unemployment or living on the bottom rungs of the wage scale. Maybe a payback for the white, middle-class liberals that voted for Obama?
The credit crisis is not only affecting business loans and home loans above federally guaranteed limits–it is also affecting car loans. One must have a decent down payment, PLUS a great (not just “good” any longer) credit score. And of course a job. Those who are hurting will NOT benefit from this. So, I’m guessing that it’s the upper middle class that is trading in that ‘ol truck they had in the side yard, that they used on occasion, for something new. Why not? Free money I guess.