It always amuses me to see “cash for clunkers” ads on TV these days. This government subsidized program, like hundreds of others, has been a tremendous failure.
The transportation Secretary, Ray LaHood said on Sunday that unless the Senate approves $2 billion in additional funding, the Obama administration could be forced as early as Tuesday to halt the “cash for clunkers” program that has become one of the most visible and fast-acting of the government’s economic-stimulus programs. This legislation is a prime example of economics going completely senile in the hands of the state. This program would be the same as everyone burning a sofa and dining room set and refurnishing their homestead every couple of years.
In effect, the government has opened up a Pandora’s box of problems. Firstly, taxpayer money is being used inefficiently. Second, this stimulus money is nothing short of a bailout for large companies with a lot of leverage. Ford Motor Co. expects to post its first year-over-year monthly increase since 2007, in part because of the bounce from the program. Third, this program has shot up demand in such a way that dealers have not been able to meet supply, forcing companies to cut rebates that were promised. Fourth, only individuals with cars that have low gas mileage (read: SUV, Hummer drivers) are the ones getting this rebate.
No wonder Nathan Benefield is still upset that his car wasnâ€™t eligible, especially now that many of the SUVs that are traded in as â€œclunkersâ€? and are destroyed are better than his new car.