President Obama and those members of Congress who approved the cash for clunkers program as part of the most recent war funding bill are celebrating today and telling us how they knew that it “would work.” What’s their definition of “working?” Why, that people actually took advantage of it.
Imagine that. You’re going to give somebody up to $4,500 for their old worthless gas guzzler if they trade it in on a new, fuel efficient car. And people take advantage of it? Shocking! In one week, the $1 billion allocated for the program is gone. Congress today is expected to approve an additional $2 billion.
The clunkers collected through this program are supposed to be sent to a facility where they can be crushed and recycled. However, there’s some wiggle room in the language, allowing transmissions and other parts to be salvaged. And I doubt that there are sufficient controls in place to prevent the cars themselves from being resold and showing up on the roads again, either here in the U.S. or in other parts of the world.
Proponents of the program say that it is good for consumers, good for the auto industry, and good for the environment. One would also expect that salvage yards and such would get a boost from the junked cars.
The truth is that this is a blatant handout to the auto industry and auto workers unions, paid for with money the government doesn’t have and will have to extort from financially responsible citizens in the future, and taken advantage of in large part by people who probably shouldn’t be buying new cars anyway. It has the curious effect of artifically lowering new car prices to the point where it’s cheaper to buy a new car than to buy one that’s a year or two old. I’ll bet used car dealers aren’t too happy about this one.
Congress and the President, of course, are falling all over themselves trying to scrape up more deficit spending so they can continue the program. Damn the long term consequences, (some of) the people love this program! Ain’t nothing like buying votes, is there.
Don’t you just love the way our political system works?