Chris Edwards of Cato suggests “Cash for Clunkers” is the dumbest government program of all time:
- A few billion dollars worth of wealth was destroyed. About 750,000 cars, many of which could have provided consumer value for many years, were thrown in the trash. Suppose each clunker was worth $3,000 at a guess, that would mean that the government destroyed $2.25 billion of value.
- Low-income families, who tend to buy used cars, were harmed because the clunkers program will push up used car prices.
- Taxpayers were ripped off $3 billion. The government took my money to give to people who will buy new cars that are much nicer than mine! …
- The auto industry received a short-term â€œsugar highâ€? at the expense of lower future sales when the program is over. The program apparently boosted sales by about 750,000 cars this year, but that probably means that sales over the next few years will be about 750,000 lower.