It actually got people into showrooms and buying cars; people have to be able to afford a loan or write a check to buy a new car, so it's not like this is another hand-out to non tax-payers; and it has only cost a few billion and produced sales revenue, sales tax revenue, and business activity. No wonder career elitist politicians don't like it.
What it is is a transfer of cash from lower-income Americans who depend upon having modestly-priced used cars available to purchase and drive to higher-income Americans who can use such a subsidy to trade in a perfectly fine used car for a new one, as well, of course, as a propping up of the auto unions and the supposed economic performance of Car Czar Obama. Were those higher-income Americans not so incentivized to buy a new car, their dollars would either be spent on something else in the economy or stored up as savings in a bank or elsewhere in what would provide capital for business expansion.
I don’t see a smidgeon or good or fairness in the program.
Like most Gov’t programs this creates winners and losers. Why am I punished because I bought a high mileage car several years ago? Why are you rewarded because you bought a gas guzzler? Why do the Feds have the right to take $4,500 out of my wallet at the point of a gun and give it to someone else? How deserted are the auto showrooms going to be when this boondoggle ends? Where are the working poor going to find an affordable used car after the Feds destroy a million serviceable cars? Why is this Gov’t Charlie Foxtrot better than letting working Americans keep more of their hard earned dollars? How is the economy stimulated when the Feds suck a trillion dollars out of it? I have many more questions, but these will give you something to consider?
Another handout to the auto unions is what you mean.
With the job market so precarious I fail to see how people taking on an auto loan is such a great idea.
Since many of the so called ‘buyers’ are putting none of their own money into the purchase I can just see them walking away from their auto loans as they walked from their mortgages.
Interventin in the ‘free market’ is not a good idea I fail to understand why you love this handout so much.
The fact that decision makers in DC are pretending to be shocked by the 'success' of this program is another example of their a)stupidity, or b) their belief that American voters are stupid.
From a Bloomberg article:
U.S. Auto Sales May Reach 2009 High on ‘Clunkers’ Aid July 31 (Bloomberg) -- U.S. auto sales may reach a 2009 high in July after the government’s $1 billion “cash-for- clunkers” incentives program lured shoppers back to showrooms. Industrywide deliveries will run at a seasonally adjusted annual rate of 10.1 million cars and light trucks, based on 7 analysts surveyed by Bloomberg.
Yes, with my money. I have my own bills to pay, thanks!
This all sounds great as the public releases the pent up demand for new cars, but the result could be an accordian like slump in the future as there will be fewer new buyers down the road. It also hurts the used car market driving up prices for those on the lower end of the economic scale. Government intervention into the market always has unintended consequences.