It is pretty clear that the Cash for Clunkers proposal is a dumb idea to intervene government in the economy and distort the market (or as Charlie Dent called it, a lemon). But it is also likely to pass, as it is included in the War Appropriation bill (Don’t see the connection? If we don’t pass Cash for Clunkers, the terrorists win.)
So I got to thinking, “Daddy needs a new car”, so let’s see what I can get out of this dumb idea.
Turns out, I get nothing. The official fuel economy on my car is just a hair over the 18 mpg limit (granted, I don’t get 18 mpg, but that’s how it was listed when the car was new).
But what really gets me is that fuel economy is the only definition of “clunker” – that is, my 1995 Buick Riviera with the dent in the side that makes a lot of noise it shouldn’t is not a “clunker” – but my bonehead neighbor’s 2008 Hummer is. In other words, this is simply a subsidy program for rich people who bought SUV’s a couple of years ago, and are now regretting that decision.
It should also be noted that cars traded in for the subsidy have to be destroyed – which may mean my neighbor won’t traded in his 2008 Hummer, since he would get more in trade-in value. But for me, I get the shaft again, because the type of car I am in the market for would be about a $3,000-$4,000, slightly newer car or truck – i.e. the ones my tax dollars will be buying and destroying.