Posted on 08/01/2009 8:12:57 AM PDT by PureSolace
Press reports late Thursday said the government's Cash Allowance Rebate System could already be out of money, hitting a major speed bump and possibly causing dealers some drama.
...
CARS works this way: Owners of a 1984 or newer vehicle getting 18 mpg or less in combined highway/city ratings can trade in their so-called "clunkers" for more fuel-efficient new cars (in some cases only a few extra miles are required). For their trouble, owners get $3,500 to $4,500 of taxpayer money and their old vehicles' engines are destroyed so they won't end up back on the road.
That last part, the destruction of engines, is causing heartburn for more than a dozen already hurting auto-parts suppliers who have had to file for bankruptcy this year. As Michael Wilson, executive vice president of the Automotive Recyclers Association, told a reporter, "Why throw away good parts when the supply chain is in jeopardy? It doesn't make a whole lot of sense." Catherine Tsai, in a story she wrote for Associated Press, reports that engines and drive trains account for 60 percent of recyclers' revenue from a used vehicle.
Tsai quotes various auto recyclers who prove the point that the government program benefits those who have enough money to pour into a brand new vehicle while hurting people who need help the most. Norm Wright, the CEO of Stadium Auto and Truck Parts Inc. in Denver, said of the program to destroy perfectly good vehicles, "Now you're removing cars people could afford, and they're not available anymore." He added, "There will be less cars to pull from, so the price of parts will go up."
It's unbelievable that the government has set aside $1 billion of taxpayer money to remove roughly 250,000 drivable vehicles from the road.
(Excerpt) Read more at oregonlive.com ...
This was a very well thought out, but worrisome, comment.
Wrong, the democrat want you to lose weight and drop dead and stay out of the hospital unless you are a minority democrat voter.
The Senate won’t get around to this crisis until next week. Contact your Sens to kill this program.
I posted this on another thread but it’s highly relevant to this type of program:
Its the fallacy of the broken window. A thug breaks a window in a store. The store owner buys a new window. Presto, the economy has benefited because the glass seller has a profit. Should we go around breaking windows (or destroying cars) to help the economy?
NO!
The storeowner would have bought something else with the money for the window, say a new accounting program to make his life easier. He would have had the window and the new accounting program and been better off, while his spending would have been the same.
In this case a new car is sold and an old car is destroyed. The tax money to overpay for the old car and destroy it could have been spent on something useful so the economic effect would be the same and wed still have an old car on the road for people that cant afford a better auto.
The Democrats love to steal from the unborn!!
They purposely exclude the oldest vehicles from the program, knowing that the vehicles they’re destroying would probably have been the next step up vehicles for those at the low end of the income spectrum. This makes it less and less likely that the poor will be able to have their own vehicles in the future. It also (as you stated) will drive the cost of used cars up, and make maintenance more difficult and expensive for those who have cars in that age range.
________________________
I heard a caller from France on talk radio who said that Americans have it wrong. They think that people overseas are all about the environment when, in fact, if they can afford a car the only car they can afford are the tiny ones. It’s not that they like them; it’s that they’ve been boxed into a corner.
As we all know, the supposed “energy savings” is a smokescreen for something else. When I think of all the parts that are going to be made unusable, it sickens me. The parts remanufacturing industry was one of the first “recyclers” and is very efficient. Don’t think for a moment that your old cars have been going into landfills complete. The figure on how much energy they save would be astounding.
Obviously, this is an indicative of a plan...but for what?
Good move.
Wait 6 months to a year and the used car lots will be stuffed with almost brand new vehicles that have been Repo'd.
Its the fallacy of the broken window. A thug breaks a window in a store. The store owner buys a new window. Presto, the economy has benefited because the glass seller has a profit. Should we go around breaking windows (or destroying cars) to help the economy?
NO!
The storeowner would have bought something else with the money for the window, say a new accounting program to make his life easier. He would have had the window and the new accounting program and been better off, while his spending would have been the same.
In this case a new car is sold and an old car is destroyed. The tax money to overpay for the old car and destroy it could have been spent on something useful so the economic effect would be the same and wed still have an old car on the road for people that cant afford a better auto.
...except in this case, the government is offering money to "have the windows smashed."
I wonder how much longer it's going to be before they start taking living victims?
I have old appliances. Will there be a cash for old appliances program?
Mark
I bought a new Fusion in May. I had an ‘88 car that would have qualified as a clunker, I think, but took the re-bate and gave the clunker to somebody who needed transportation.
I was attached to my clunker... it is still a good car that didn’t need to be crushed.
Shhhh! There will be after they read that!!! LOL!
Damn shame. But wait. The fools that think they are making a real deal now have a car payment for something that is a headache. Clunker was probably paid for and probably had more miles. Dealers are upset that now they have a clunker that they cannot salvage parts. Same as goes health care. Maybe they will allow salvaging parts of the old that are let to die with a pill instead of life saving care.
***It’s unbelievable that the government has set aside $1 billion of taxpayer money to remove roughly 250,000 drivable vehicles from the road.***
that is the point! Keep the poor into mass transit!
Destruction is the name of the game.
That fact that the cornerstone of this ‘program’
involves stripping the ‘clunkers’ of their most valuable
parts, thereby removing a huge part of the livelihoods
of people who’ve been in this industry probably for generations, tells you a LOT about the Leftist, Big Government mindset, and how COMPLETELY they want the
advantage of a ‘clean slate’ and how far they’re willing to
go to get it.
Not so oddly, the same mindset was in operation when the
few remaining “electric cars”, fifteen or so years ago, which had lots of people excited in California because of their potential, were ordered DESTROYED by a special Board of the State in CA, never to be thought of , or referred to again.
The program could easily destroy 2 or 3 million cars a year if it became permanent. In a decade, that would be 20 or 30 million older cars taken off the road. I think this would be a very noticeable change in car “demographics”. There’d be fewer older sub-$4500 cars and more smaller, newer cars. Just like Europe!
I wouldn’t be surprised if some of the lefty groups have thought this through with particular social ends clearly in mind. It’s ironic and unfortunate how nicely the left’s social engineering tendency fits with the corporate world’s anti-competitive tendency and willingness to snuggle up with the government if it decreases their risk. The clunker program has the trifecta of pleasing leftist social activists, opportunistic politicians, and the auto companies, and is therefore very likely to become permanent.
Get this,
My son works at a dealership.
Cash4Clunkers Step 1——>Seize the engine so it cannot be used again by pouring chemicals in the carb to seize rods and bearings.
And, how much will a recycler offer me for my engine? $50?
How much would they charge me to buy my engine back?
How much will a recycler offer me for my entire car? $250?
How much would they charge me to buy my car back?
IMO, recyclers, a.k.a. junkyards need to put up or shut up.
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