Posted on 08/05/2009 5:00:11 PM PDT by bigbob
Cash for Clunkers is robbing the construction industry
It looks like the "Cash for Clunkers" bill has been a huge success. A bill that was intended to stay in effect for many months, burned through a $1 billion budget within weeks. It looks like they hit the jackpot - at least until their money ran out.
So with a program this is fantastically successful for whatever it is trying to achieve, the logical choice would be to add more money to the bucket and "ride 'er till she bucks ya". But where do we get this money you ask? It comes from the stimulus money set aside to fund renewable energy construction projects. Another $2 billion dollars of funding for the cash for clunkers program has passed the House of Representatives and is expected to pass the Senate on Friday. Aren't they just robbing Peter to pay Paul. Actually, it's more like taking the money out of the left pocket and putting it in the right, but they could just be throwing it in the street.
"If Congress decides to extend this initiative, I believe we must not rob from the loan guarantees we provided through the recovery package that, in the long term, will shift our country to home-grown, renewable energy while creating good 'green collar' jobs," Senate Energy Committee chairman Jeff Bingaman said, according to a Reuters report.
I'm actually not that upset even though, I'm sitting here as a construction professional (no smirking) without a job, because I think it's a pretty creative idea that will in the least get people to drive more fuel efficient cars, and could rejuvenate a stagnant auto industry. As a card-carrying armchair economist, I'm not opposed to the whole thing, but even my slightly idle mind can point to some small holes in the oil pan.
So what if I trade in my "clunker" (that must get less than 18 miles per gallon) and get my $3500 rebate for a newish car (if the car gets less than 10 mpg you get $4500) and the dealer turns around and instead of demolishing it as they are supposed to, they sell it for $2,500? Then we've got two cars on the road instead of one and both the dealer and buyer lined their pockets with money that could have otherwise gone to building renewable energy facilities. Did they figure out a way to stop that one? I hope so.
But again, I'm not complaining because I think its a good attempt at being economically and environmentally sensible at the same time. It may take a couple more generations, but we should be good at it eventually - being sensible that is.
Also, the numbers don't add up.225,000, cars , and that is at $5,000 per car. That means auto dealers would have had to sell OVER 225,000 newer cars, that have far superior gas mileage , and that car lots would be swamped with over 225,000 "clunkers". And that is for $1 billion dollars.
It is robbing the TAXPAYERS
$$$$ bump
The Construction industry????? Hey buddy, the 4.500 is coming out of MY tax dollars so some asshole liberal can buy his 3rd generation Prius!!!!!!!! IT’S MY MONEY!!!
This Cash4Clunkers is horrible - absolutely horrible - for the poor or young, and for the environment.
Instead of recycling - the very “sine qua non” of the environmental movement - those vehicles to those who can’t afford new cars, we’re destroying both the economic value AND DISCARDING THE ENERGY IT TOOK TO CREATE THE VEHICLE.
And we’re doing this via a high-interest loan from Dictatorial Mainland China.
This is wretched. Absolutely wretched.
No. Even if that were the case, you'd have to "sell" the clunker for more than you originally paid for it..
no the money is not taxable to the car buyer
this has been defined in the law
what has not been defined is
is it taxable to the dealer?
ON this subject, but from a slightly different angle; In what way are the people trading in clunkers for new cars being qualified and determined CAPABLE of paying for a new car?
Are THESE loans going to start going into default in six months or so? Who is going to pick up the pieces when hundreds of thousands of CARS start getting repo’d because the owners can’t make the payments? Just sayin’.
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