Posted on 08/03/2009 6:26:39 AM PDT by Cheap_Hessian
Let’s have a $4,500 subsidy for everything.
Americans are streaming back into auto showrooms, and one reason is the “cash for clunkers” subsidy. Democrats are naturally claiming this is a great success, while Republicans are claiming that because the program has run out of clunker cash so quickly, this proves government can’t run the health-care system. How do we elect these people? What the clunker policy really proves is that Americans aren’t stupid and will let some other taxpayer buy them a free lunch if given the chance.
The buying spree is good for the car companies, if only for the short term and for certain car models. It’s good, too, for folks who’ve been sitting on an older car or truck but weren’t sure they had the cash to trade it in for something new. Now they get a taxpayer subsidy of up to $4,500, which on some models can be 25% of the purchase price. It’s hardly surprising that Peter is willing to use a donation from his neighbor Paul, midwifed by Uncle Sugar, to class up his driveway.
On the other hand, this is crackpot economics. The subsidy won’t add to net national wealth, since it merely transfers money to one taxpayer’s pocket from someone else’s, and merely pays that taxpayer to destroy a perfectly serviceable asset in return for something he might have bought anyway. By this logic, everyone should burn the sofa and dining room set and refurnish the homestead every couple of years.
It isn’t clear this will even lead to more auto production over time, since the clunker cash may simply cause buyers to move their purchases forward. GDP will get a fillip in the third and perhaps fourth quarters, which will please the Obama Administration.
(Excerpt) Read more at online.wsj.com ...
Slight of the hand, walnut shell game. Now you see it, now you don’t. This ain’t right folks. The less fortunate Americans could do well acquiring cheaper transportation with these clunkers that are still viable, useful. The only gain in this operation is the UAW, and Obama owes them much! Help America by calling YOUR Senator and telling him it’s not right to abort babies, or cars...or old people.
In the end actual cost to the tax payer will be much more than 4500.00. Just more payola for the unions.
The parable of the broken window was created by Frédéric Bastiat in his 1850 essay Ce qu'on voit et ce qu'on ne voit pas (That Which Is Seen and That Which Is Unseen) to illuminate the notion of hidden costs associated with destroying property of others.
In other words: destroying perfectly good cars is not a good way to grow the economy.
My paid for v8 powered 4WD automatic transmission 1987 F-150 long bed with just over 101K ORIGINAL miles is staying right here. Who cares if the best I get is 12MPG (downhill, with a tail wind). Why should I go into debt just to have a new truck when this one does everything I need it to do?
But the Glazier (UAW) in this case bribed the little boy.
And, how many jobs will this create and sustain?? What happens when a lot of these new car buyers can't pay the monthly payment and default?? How much will it cost us (AGAIN!!!!) to recover these vehicles??? How much will they cost the dealer who has to stock them on his lot while they don't sell???
Inquiring minds . . . . . .
I couldn't get $100 for this thing if I offered a $95 rebate on it.
Ironically, the engine and transmission are in great shape. The last time I had a mechanic run it through a battery of tests, he thought his equipment was malfunctioning because the compression test on the engine gave results that are typical of an engine with about 75,000 miles on it.
regular oil changes will do that for you.
1. Driving style (I'm a relaxed driver who doesn't do hard stop-and-starts, and I do a lot of highway driving . . . just had my first brake job on my truck at 75,000 miles).
2. Not only regular oil changes but regular transmission fluid changes (I typically change the trans fluid every 15,000 miles).
3. My SUV has a separate transmission oil cooler, which helps reduce wear-and-tear on the trans.
Thanks. I need to research Mr. Bastiat.
Question to all: Is there also a tax liability of $4,500 when you sign on the dotted line? Please confirm...
Yes. The big question is whether the buyer and the dealer will BOTH have to pay the tax.
Ok, I just called my local Honda dealership. I asked the question about tax liability. The salesman placed me on hold, went to the finance guy and came back and said: They checked into this and were told NO tax liability.
He then said: Since this is the government, who in the hell knows! He also said that this program was intended for people who don’t have any money or pay taxes!
He reminded me that when I come into the showroom, ask for Jim, the guy in the White Hat...
Ok, I called my Congressman Jack Kingston’s office in DC. They researched this tax issue and just now called me back.
Quote: “There is NO Federal tax liability.” However, they said there may be a state sales tax on the entire purchase amount (i.e. without the clunker cash). They said each state is handling the state tax differently depending on state tax law/statue.
“What the clunker policy really proves is that Americans aren’t stupid and will let some other taxpayer buy them a free lunch if given the chance.”
Exactly, the vast majority of us will take the path of least resistance.
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