Politics Cash For Clunkers Revisited

remember the cash for clunkers program that was supposed to help the enviornment, and get the economy rolling again? well it looks like it failed on at least the enviornmental stand point, and i'm sure the middle class families didn't appreciate the used car prices rising.

 

and it didn't have much stimulative effect, either -- it just pushed purchases forward time-wise. After the program expired, sales fell off a cliff.

 

It made cars less affordable for the working poor as well. The average price of used cars went up as fewer of these cars were available.

It is interesting how belt-way liberals view the world and the ignorance they have of people struggling trying to make it. I was in the Chicago area over the holidays visiting relatives. In the Chicago area there is a maze of toll roads, it can easily cost $5 to $10 for a round trip somewhere (of course the poor folks can find alternative routes - less traffic for the rich, you know). If you go downtown Chicago, it will cost about $5/$6 an hour to park (of course poor folks can forgo enjoying downtown Chicago - rich people don't want a bunch of poor people running about.) Gas prices in Chicago are the highest prices you will find in the entire state, highest in the region, and at times the highest in the nation (heck, poor people don't need to drive). Oh, city vehicle tax, state vehicle tax, high insurance, high crime (car thefts, car break-ins) and bad roads. And the belt-way liberal wants to do cash for clunkers! Poor SOB's can walk -or take bad public transportation - nothing like the smell of urine in the morning.

 

From a cost-benefit perspective, it was a success, resulting in $3-6 billion in sales (depending on who is counting) and another $2-3 billion in fuel savings by getting less efficient cars off the street...at a cost of $3 billion.

As a long-term policy, I would agree it was not the best of ideas.

 

redux, I highly, highly doubt that the $3-6 billion of sales is new sales that would not have occurred anyway within the next 12-18 months. The program's value has to be measured in incremental sales over baseline, not by gross participation. I understand it's not easy to measure.

 

Just presenting the other side....from the non-partisan GAO report.

The GAO report found that "the program helped stimulate economic activity as measured by [vehicle sales, Gross Domestic Product, and employment]," and that "the CARS program put more fuel efficient vehicles on the road," with the average fuel economy of new vehicles sold under the program increasing by 59% over traded-in vehicles.

 

I am amazed by how much our economy has been stimulated, given such anemic economic growth. But, I guess belt-way liberals need to feel good, so measure the positive and not look at the impact on people. So when, a single mom who can not afford transportation to work, drops out of the work-force, does it make a sound?

 

yes, we should trust the people who couldn't get a small program to do what it was intended with saving us from the fiscal cliff. i love how people just willfully choose to forget about past debacles and think these same people will get something infinitely more difficult correct.

"at least we tried"

that sounds like a great motto to run a disaster of an administration

 

"At least we tried" is damned irresponsible. When the govt "tries" something, it affects other people's lives and does it with other people's money. And then the people who did the trying don't have to live with the consequences. But I guess the ones who tried feel better about themselves for trying, so the waste of other people's lives and money is worthwhile.

As Milton Friedman said, the value of a program should be measured by its results, not its intentions.

 

One can pick apart individual components of the stimulus program for not being 100% successful....and ignore independent analyses that suggest that the program achieved some level of success.

Thats what opponents do.

Very little that government does is 100% successful. But I want a government to face a challenge head on and not be afraid to fail, knowing that failure brings political consequences; a government that is willing to try new things rather than policies that we know have failed in the past.

And surveys of economists across the board believe the stimulus program has been a contributor factor (along with Fed policies) in preventing the economy from falling into even deeper recession and contributing to nearly 3 years of steady (albeit less than ideal) economic growth.

 

any company can still be around if the govt is willing to take a $15 billion loss to keep it alive.

 

They should have had stricter limits on what cars could be traded in. Like cars that were 1989 and older, and cars that got less than 20mpg. But, they should have been made to buy hybrids or cars that could get over 40mpg (no trucks or SUVs).

But, instead of just nationalizing the auto industry or providing them an even bigger bailout, they set up this program to try and get some business for the car makers and part manufactures.

And they should have recycled the metal and reused parts that they could. But it was a rushed program to help the economy.
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And the hit to the economy would have been much bigger if the US auto industry got taken out by the financial loan industry collapse and the housing markets in the Rust Belt tanking would have destroyed cities and reduced taxes by a lot over the next few decades...let alone the other businesses around here that depend on money from the auto industry employees flowing around their cities.

 

why not try it? people have been trying trickle down economics for 30 years, that hasnt worked, yet its the republican platform. Compared to that, this program should be implemented for everything. Got an old loaf of bread? bring it in, get a coupon for a fresh more nutritious loaf.

 

So it goes with most government policy designed to micro-manage market activity - if there is a winner there will be a loser. I don't think the government should be in the business of picking winners and losers. In the case of old high pollution vehicles on the road, the role of government should be to try to make sure the real social costs are reflected in the price to operate these vehicles. If the real cost of these vehicles is greater than the real benefit, market forces will cause them to be removed.

 

Start with the fact that the article in the OP did not even consider the economic impact.

The Cash for Clunkers program came at a time when the economy was at its lowest and still shrinking.

By any measure, it put $billions into the economy, kept many dealerships afloat and the resulting auto sales added to the GDP.

As an temporary economic stimulus, it was a success. We can debate the extent to which it was a success.

As an environmental program, it was not.

In any case, it was certainly not a long-term policy to micro-manage anything.

It was a short-term program that worked on the most important level....it was one small piece that contributed to preventing further recession when the economy was on the brink...and it paid for itself and more.

 

It doesn't make a sound - see previous post.

According to some sources the average price of used cars went up about 10% or $1800 after cash for clunkers. Who got screwed?

Used car prices skyrocket a year after Cash for Clunkers « Hot Air

Why do you ignore this?

 

It accomplished its short term economic purpose...$3-5 billion in sales keeping dealerships afloat at a time when people were making the economic decision to postpone buying a car and circulating more money through the economy at a time when it was teetering and many of those jobs would have been lost.

And it faded away as it should have.