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"Cash For Clunkers" Program Runs Out of Gas
Ponca City, We love you writes "The Washington Post reports that Transportation Secretary Ray LaHood has called members of Congress to inform them that the 'cash for clunkers' program will be suspended because the program has run out of money, and congressmen say they intend to ask the Obama administration to divert some funding from the existing economic stimulus package to maintain a scheme that they see as genuinely stimulative. 'Clearly, this has been a very stimulative program that's got consumers back into the car market. It's our hope that possibly more funds can be made available,' says Cody Lusk, president of the American International Automobile Dealers Association." If there is more funding, though, a report on CNET says it may come out of money to have been set aside for renewable energy loans by the US government.
Is anybody going to buy a new car just because of this handout? Seems like it's juust giving a bonus to anybody who was going to buy one anyway.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
"The $1 billion program was set up by the U.S. government in June. The idea was to entice consumers to trade in their gas-guzzling cars for more fuel-efficient models, both to boost auto sales and improve the nation's fuel efficiency."
Bicycle, bicycle, why don't you ride a bicycle?
Cars are like, heavy, man.
"Kill 'em all and let Root sort 'em out"
Cheers
I work for many car dealerships and know there's an IT admin somewhere in the fed govt that's having a really bad month.
The backend sites (fueleconomy.gov and esc.gov) are damn near useless - they mandate dealers scan in all the paperwork and upload as pdf, but it's basically been one big DDoS - all the dealers in the country trying to submit the deals right here at the end of the month. Been this way for days.
When you give people their own money back, they spend it.
Who'da thunk it?
Why, I think they could learn from this and practice some more evidence based policy by giving everyone their own money back, and then they could stimulate more than just Government Motors.
Linux - Because Mommy taught me to Share.
Perhaps this is just an anecdote, but the few people I know that took advantage of this program bought a Honda or Toyota as they have pretty good gas mileage comparatively. I do find it comical that this is being floated as a stimulus plan when it seems to be going to foreign car companies. But I suppose as long as more people end up driving efficient cars, this is a worthy goal. I'm just unsure if it is do-it-right-in-the-middle-of-a-recession worthy.
I'm still not in favor of this "stimulus". Not only is it for a group of people that have older cars. But it rewards those who were too irresponsible to buy "fuel efficient" cars to begin with. Honestly, 5 years ago you could have gone out and bought a Hummer, and now you can trade it in, and get a discount on your next purchase.
Then what I don't understand is that all of the car that are traded in, go straight to the car crusher. What about all of the families that are in need of a decent affordable car, but cannot afford to buy a brand new one? Why not give a tax credit to everyone who buys/owns a new vehicle that meets a certain MPG?
It just seems like this bill rewards those who are rich and were environmentally irresponsible over the last 10 years.
They estimated that $1 billion would be enough. They figured that would last for six months time.
It barely lasted 2 weeks.
This is why central economic planning doesn't work, and why shortages ran rampant throughout the Soviet Union and eastern communist countries. Simply put - Government politicians are no good at running an economy. They don't have the necessary skills.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
I believe that the program has already received an additional two billion dollars of funding by Congress last Friday before they recessed for the summer.
If you think that the only one who benefits when someone buys a car, you're sadly mistaken.
Everyone who buys a car in the United States puts money in the hands of the car dealership, the salesperson who sold the car, the manager of the dealership, the automobile company's American division, the autoworkers who built the car, the companies who make parts for the car, the employees of *those* companies, and so on ad infinitum.
Buying a car is one of the most patriotic things you can do outside of buying a home. It puts money in so many pockets that there really ought to be incentives to buy automobiles. This program should continue to be supported and funded because it is exactly the kind of fiscally conservative action that puts the money the government takes in taxes back in the pockets of the American public.
So yeah, buy a used car if you want to save money, but please realize that you aren't helping anyone except the oil companies in that case.
Don't the traded-in cars just get sold as used cars? So this program put not only the newer, efficient cars on the road but also leaves the older inefficient ones rolling around. Your tax dollars at work benefitting people who bought big SUVs a few years ago who want to trade them in already.
Subsidizing new cars isn't a great idea. The government is still moving money around, which is inefficient. Its like moving energy-there is some loss for administration at the least. When the government does it, they have to raise taxes, which creates disincentives on the margin. This ends up being another bailout for the auto industry as well. If the industry really needs all of the money we are giving them, we should have let them collapse and move all of that capital to places where it would actually do some good. But, if we are going to do the whole stimulus thing, and we aren't going to cut taxes like we should, then this seems like a marginally acceptable way to do it.
http://bgcommonsense.blogspot.com
Trade my old Pentium I and II systems in for a Quad-Core system with 8GB RAM?
Friday afternoon congress approved another $2B for this program. So it hasn't run out of cash yet. Cash for clunkers rolls on, but thanks for the inflammatory headline.
True, but most (90%?) of the cars i see have one (1) person in them.
A 75 kilo/150 pound person using a 750 kilo/1500 pound contraption to transport him or herself
just doesn't seem logical to me. I think an internal combustion engine is beautifull, but do we need one per person? And i think boosting car sales and being more energy efficient are difficelt to combine, even with the more efficient and cleaner engines, but the net effect might be positve, i'm certainly no expert.
Two kids on a bike is easy, just not on a mountain bike, or indeed, on a mountain ; ).
"Kill 'em all and let Root sort 'em out"
A lot has happened on this front already, see http://news.yahoo.com/s/ap/20090731/ap_on_go_co/us_cash_for_clunkers and http://www.nbc-2.com/Global/story.asp?S=10832983
This was on NPR national coverage earlier this week.
Within 24 hours of the news getting out that the program was out of money congress rushed a pre-recess bill to the floor to make sure 2 billion they had in reserve for this program was authorized for disbursement.
Hate to put a damper on all the anti-government diatribes, but congress realized this form of stimulus has worked, and have been swift to see it continues.
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Another BAD choice by the Americans.
Why do away with functional vehicles that serve a purpose and get the americans indebted even more?
Why increase the US deficit even more and give the money to the people which will get loans to finance a new(er) car.
Peter Schiff had a recent videoblog about this.
So this bank holiday is true?
Thereby preventing the poor from having any meaningful mobility in our public transport deprived cities.
Since larger cheap stores are nearly uniformly located on the most important roads into the cities, this puts those stores more out of reach of poor people, forcing them to acquire food, and anything else really, in more expensive inner city stores.
After all, what would democrats do if the poor become rich enough to actually feel they have a good life in America ?
They estimated that $1 billion would be enough. They figured that would last for six months time.
It barely lasted 2 weeks.
This is why central economic planning doesn't work, and why shortages ran rampant throughout the Soviet Union and eastern communist countries. Simply put - Government politicians are no good at running an economy. They don't have the necessary skills.
I suppose all those executives at lehman brothers and AIG were so much better right?
and I suppose robber barrons, cartels, MAFIAA, and health insurance firms are providing so very well for the populace at large!
There is only one real difference between public and private management of the economy: The government is, at least mildly,ACCOUNTABLE.
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If the economy and the fall of the major auto makers haven't put dealerships out of business, this program surely will. Many dealerships have already delivered multiple $4500 rebates to their customers, and have yet to be reimbursed. It looks doubtful that they ever will. Many of the deals have yet to be accounted for by the NHTSA system due to glitches and server load. So... not only is this idea horrible from a national fiscal policy point of view, but now the very businesses that this is intended to help out, which are already struggling, are being forced to give large interest free loans to the federal government that very well may never be repaid.
If the initial 4 billion was supplied that was initially asked for we wouldn't be having this discussion.
So, you really don't know how government works. ALL programs are designed to 'run out' and be extended. This one just has got more public notice then most.
---- Booth was a patriot ----
But it rewards those who were too irresponsible to buy "fuel efficient" cars to begin with..
If that isn't an elitist and offensive attitude, i don't know what is. You sir, can take your prius and shove it.
---- Booth was a patriot ----
While a lot of people have discussed the idiocy of this program (rewarding people who made bad decisions, destroying working cars, and vastly underfunding the program), another point we should consider is that this program is probably a direct result of the US government's continuing involvement in the US auto companies. I doubt there would be as much support for a cash for clunkers program, if it wasn't for the fact that US government directly or through the UAW owns two of the three car companies. So in addition to the direct bailouts, somewhere above 50 billion dollars, we have at least a billion (and perhaps as much as 3 billion, if Congress continues to fund the program) thrown away in an attempt to generate business for the car companies. This is a classic case of throwing good money after bad.
I wasn't planning to get a car for several more years, but CFC made buying a car early worth it. I had an 05 Scion tC and a (clunker) 94 Dodge Dakota. Cash for clunkers put a new Mini Cooper S in my reach with almost no car payment. So I spent a month selling the Scion, and was due to turn in my clunker Friday morning when the money ran out and the dealer got shy of doing the deal. It left me in a bad spot because I didn't want to buy a car without CFC's at all, but I was now driving a mostly unmaintained unreliable car for a daily driver, since my perfectly good car was already sold. There was no warning things were about to go to crap with the program.
I was lucky things worked out by the end of Friday, but I spent a harrowing 9 hours camped at the dealer making sure I was first in line for any remaining funds in the program, and (slowly) submitting the paperwork to the cars.gov site. Cars.gov was so spotty that I participated in the document submission part (and had better luck than the dealer) to make things go faster.
I never would have gotten involved in the program if I'd known it could have run out at any minute and endangered my finances.
So this "stimulus" money:
Yes, this sounds like a brilliant idea to me.
And on the subject of "improving efficiency of the fleet" - look at the relatively low mileage targets the program has: they consider 26MPG highway to be an improvement? If they REALLY wanted to improve the fleet mileage, they would have insisted upon any car being purchase having at least 40MPG highway.
Sorry, this is just the "bread" part (with the ongoing MJ crap being the "circuses" part).
www.eFax.com are spammers
What a great way to fix a recession caused by people who got into too much debt buying houses they could not afford! Let's make them get rid of their cars and buy new ones for more debt! Credit is the fuel on which the economy runs, you know. If these people stop spending, then by golly, we need to give them more money so that they can KEEP spending DAMMIT!
There is only one real difference between public and private management of the economy: The government is, at least mildly,ACCOUNTABLE.
Really? We should not forget where the current economic meltdown began. Congress, particularly one committee in the House, regulated and looked out for the interests of the nation monitoring the financial health of Fannie and Freddie Mac. Chris Dodd and Barney Frank, both high ranking members of that committeereceived the most political money from Fannie Mae and Fannie Mac over the past 10 years (Obama was in the top 3 as well [quite the coup for someone who has not been in politics that long]). Their failed oversight may have gotten Dodd a sweetheart deal on his home loan, but the rest of us? We get the to pay for the bailout. Those two knuckleheads are still on Congress.
When a company fails, it fails a percentage of the people. When government fails, it fails all of the people.
Accountability in government is a shell game.
Most fail to take into account .. the money can go to any car .. so plan on seeing the money used for more non US cars.
Sorry but nothing was written into the law to prevent that .. again another half ass law..
Yeah, I think we really need to make gas more expensive. It's taxed to cover the roads, but I think it should also be taxed to cover much of our military spending as well... especially since it seems that our military is primarily used to protect our petroleum supplies these days.
We have to do something to reverse the trend of so-called "urban planners" to put such emphasis on automobiles. We are looking to move, and by far the easiest way for my wife and I to get an apartment between our two jobs and drive in. For my wife, public transit might be an option except the neighborhood is so shitty - but for me, public transit would be a nightmare involving two trains and a bus... all to save a 15-minute drive.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
Well, in the US right now it's more often than not "sorry, you're too poor." A national health system that encourages people to pick up preventative care is win-win for everyone (except the richest of the rich). Emergency rooms aren't a solution.
You can lead a horse to water, but you can't make it dissolve.
There is only one real difference between public and private management of the economy: The government is, at least mildly,ACCOUNTABLE.
Uhhh... are you living in the same country as the rest of us? Corporate executives are accountable... to their respective boards of directors and/or stockholders. If they do things to far out of line, they can certainly expect to loose their jobs. You don't generally see companies spending double their income year after year, as a certain Government who shall remain nameless has been doing for the last year or so.
âoeAny society that would give up a little liberty to gain a little security will deserve neither and lose both.
I see absolutely nothing in this story that in any way relates to Technology. This belongs in the Politics section, editors. Please stop cluttering my Slashdot frontpage with anti-government flamebait.
The reality is quite the opposite.
Without government bailouts, the worst a private company can do is to piss away their own money (and that of their clients who have hopefully done their risk-management homework) and go out of business.
When the government screws up, you pay them a trillion dollars at gunpoint so they can try it again.
He who lights his taper at mine, receives light without darkening me.
More lies from the echo chamber, it began when, under the montra of "government regulation is bad 'mmkay" they repealed the very laws which were put in place after black tuesday specifically to prevent the great depression from happening again.
I suppose next you'll blame the CRA, which only made red-lining illegal, not denial of loans based on credit history.
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Uhhh... are you living in the same country as the rest of us? When corporate heads screw up, they leave the company with tremendous "golden parachute" severance deals, then go on to be hired by some other company at even higher compensation. They most certainly do not end up suffering the way free-market zealots say they should.
The Mongrel Dogs Who Teach
The amount of fossil fuels used in making the new car far outway the amount in savings it will have over the "Clunker" The car companies raised their prices in order to compensate for this rebate, so this is nothing more that a handout to the auto manufacturers. Plain and simple. What people should be doing is learning how to maintain their existing car. I guarantee that a well maintained 20yr car is more fuel efficiant than any 3yr old car, driven by the average American house wife that hasn't had the oil changed since she got it and the engine lights been on for the past 6months.
Government accountability!?!?!?
ROFL
I'm going to be laughing for days.
The housing bubble was funded primarily by mortgage backed securities. The largest buyers of mortgage backed securities were foreign government entities. In other words, bureaucrats made bad decisions about how to invest other people's money. And you blame the resulting problems on the free market?
Perhaps you shouldn't be talking about things you know nothing about...
Agreed. The system makes no sense. There are people for whom an old car is not especially polluting, because they only drive it an average of 5 miles per week. Possibly it is a second vehicle that they keep at a country house. Perhaps they are usually outside the United States.
Giving away taxpayer money causes inflation. The inflation is not only in the dollar generally, but also in the price of new cars. Those who focus on the free taxpayer money they are getting may not realize that the dealer has raised prices.
To me, the "Cash for Clunkers" program seems like government corruption. General Motors failed because of consistent bad management, in which most of its cars were rated poorly by Consumer Reports.
Now taxpayer money is being used to support bad management, and the taxpayer money goes to support people who have enough money that buying a new car is a goal, instead of finding a job, or getting through university.
The U.S. government has no money. In the entire history of the world, it is the entity most deeply in debt.
I've discovered that U.S. citizens do not want to believe that their government is corrupt. When they are presented with evidence of corruption, most avoid awareness.
this was in the pathetic local paper on Wednesday
Without government bailouts, the worst a private company can do is to piss away their own money (and that of their clients who have hopefully done their risk-management homework) and go out of business.
and take hundreds of thousands of people down who are innocent of any wrong-doing and would have virtually no recourse.
I repeat - private industry is unaccountable.
Now, if you want to introduce regulation which is actually effective at cutting systematic risk like this out of the picture i'm all ears, but we both know that won't happen.
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Car dealer: 'If they can't administer a program like this, I'd be a little concerned about my health insurance'...
Is this a warning sign?
Let's compare this program to the program of handing out tax rebates by the previous administration. This program has several goals: 1. Stimulate spending (I don't necessarily like this, but I think at this point in time, it may be helpful.) 2. Promote fuel efficiency. The tax rebate program handed out $300 to pretty much everyone, sometimes more. I lived in Canada at the time of the rebate programs, but still paid lots of taxes to the US, so I qualified. At the time, I was a Post Doctoral Fellow, and had some student loans from 18 years of college. I used the rebates to pay down these loans. I have no clue how this rebate spending stimulated the economy. I am positive that I am not the only one who spent the rebate money in this way. It would be interesting to see which program in the long term has the better outcome. My guess is on a program which supports heavy industry as well as on fuel efficiency, rather than paying for books from 10 years earlier.
Ehm, no http://en.wikipedia.org/wiki/Parable_of_the_broken_window
(and neither is the cash for clunkers program, if you apply this a bit wider)
I kept my 15 mpg 23 year old Jeep because frankly, I don't give a rat's ass about fuel economy and almost every new car is a soul-less POS that you have to pay 100 per hour to have repaired. The math says this is just a handout to the banks and new car manufacturers anyway. Really.... $25,000 new car - $4,500 cash for clunkers - $1,500 incentives = $19,000 in debt. Do you realize how much gas I can buy with $19,000??? Never mind the fact that you have to pay stupid high sales tax, person property tax, and carry full coverage insurance on the thing until the note is paid off.
The only people that win in this are the politicians, the car manufacturers, the banks, the insurance companies, and the state governments.
Nobody is buying a car "just because" of this. The truth is that this recession has been driven by two things. The primary factor is that people panicked. EVERYONE freaked out, THE SKY IS FALLING. The second factor is simply a side effect of the first one, banks backed off on giving credit, even to people who were low-risk.
The cash for clunkers program is enough to get both groups to calm down and face reality. People have a lot of money, they just aren't spending it. Banks have money, they just aren't giving credit to low-risk people.
A lot of fuckups made everyone gun shy towards dealing with the safe bets that drive our economy. Cash for clunkers put just enough money into the groups that are panicked to calm them down.
Your argument is a form of the broken window theory (otherwise known as head-in-ass problem). If someone can fulfill their needs by smoking cigarettes vs. quitting, then the economy will be better off if they smoke. Why? Because in such a situation smoking is wasteful - some of those people you mentioned - salespeople, managers, workers, etc - could be allocated to generating other resources that actually are in demand and ultimately that will generate more wealth and utility for society.
John Stuart Mill was a capitalist.
What those people need is the new 250mpg German car which holds just two people, and weighs about 200 pounds. It's perfect for 99% of our trips (to-and-from work or store). For the other 1% you can either drive separately (wife and kid in one; husband and kid in another), or hire a delivery truck to bring your new sofa home from the store.
Driving a Ford Living Room everywhere you go makes little sense.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
Just think of how efficient health care will be! This sounds a lot like the FEMA contracts back during Katrina. Heavy equipment operators had to abandon their work because the gov't owed them for contract work they'd already done. Gotta love government!
Hillary Clinton must've been on the phone that afternoon with Hu Jintao, twisting his arm again.
More information that gives a view of U.S. car manufacturing, and the U.S. government in general:
G.M.'s Road From Prosperity to Crisis
The U.S. government bought 60% of G.M., a company with $172.81 billion in debt and $82.29 billion in assets.
Death and Taxes poster.
The "Financial Services Modernization Act" of 1999 is mostly to blame for our current mess. If we hadn't allowed banks to merge into such large conglomerates, none of them would have been "too big to fail" and the bailouts would not have been considered.
When foreign based companies are allowed to lobby congress and achieve a very high rate of return on their lobbying dollars, there's no hope for the people.
>>>I suppose all those executives at lehman brothers and AIG were so much better right?
I think you've forgotten that they were acting on behest of the Congressional mandate to "sell more houses to the poor," even when the buyers could put zero-money down, or afford the payments. Congress even threatened to sue banks that turned-down mortgage requests. So your example is just yet another case of Government Ineptitude - driving the housing market into a bubble, and then into the ground.
If Congress had kept hands-off, banks would have used credit checks and other traditional measures to deny mortgages to unworthy (poor) individuals, the housing bubble would not have happened, and we'd not be in a post-crash situation.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
I thought this recession was caused by our country's excessive commercialism. How is encouraging the same behavior going to help? $4500 is not going to help a poor family buy a new car, so this amounts to handouts to people who would have been approved for their car loans without it. Why can't I get a free $4500 to put toward my student loans since we are just throwing money around? I don't even own a car. I use public transportation for all my travel. I'm greener than a fucking shamrock. Stop giving my money to people more affluent than I am.
P.S.
>>>The government is, at least mildly,ACCOUNTABLE.
Yes but only once every two years. The businesses/banks are accountable all the time - every day. Everytime you spend a dollar (or not) you are exerting power over the business, so if it's maximum accountability that you want, then less government and more power to the consumer is what you need.
Back when I was just a student my boss at Sears reminded me of this. I had foolishly hung-up on a customer, and the store manager then chewed me out, saying that now only did we lose a $1000 refrigerator sale, we also lost a customer for life, which is worth about $50,000 longterm.
That's the power we consumers have over business.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
Doesn't this just create an artificial bump in purchasing now keeping dealerships open that can't survive after the program ends?
Nonsense....the program gives you $4500 max on your trade-in. If you have a Hummer, you would get much more than $4500 for the trade. Nobody owning a Hummer is using the cash-for-clunkers program. The only people trading in cars are people that own cars that should have been off the road a decade ago and are worth less than $4500 now.
Without a payoff to Government Sachs, there'll be no backing for it, even if it is the only part of the stimulus package that actually stimulates the economy now ( as opposed to when the bankers spend some of the money they extorted from your children and grand children and great gr ... )
No culture has survived the recognition that they can vote themselves access to the public trough.
Not one.
What a success!?!? They bled through $1B in 3 days, and they expected this to last for 6 months. It's actually a object lesson of how stupid Congress and the Administration is in figuring out how the economic system is going to work once you start tweaking bits and pieces here and there.
If you think this is "success", just wait until we have a similar economic disaster in financing the 13,000 page Health Care Reform they blindly trying rush through Congress and to Obama's desk. If they expect $1-2 TRILLION to last 10 years, just imagine their surprise when it only lasts about 3 months.
And ironically, my Captcha was "increase", which is what all our taxes are going to do...
The submitter and nearly everybody else here seems to have totally missed the most relevant aspect, namely that this was fundamentally an IT problem.
There was a gas-gauge style graphic on the cars.gov web site, which displayed "real time" status of funds remaining. As of Thursday evening, the it was still showing $779 million remaining for most cars (excluding certain trucks) out of the initial $1 billion, and the last update time for the display clearly indicated 10:00am. Meanwhile dealers were already waving off customers, telling them that the program was suspended. Consider that you tell your boss in the morning that your project is going fine, with 3/4 of your budget remaining, only to realize by that same afternoon that your budget has actually been over-spent.
There are several IT angles here. First, when the program officially started July 25, there was only a single server hosting both the consumer and the dealer interfaces. The site was unusably slow for dealers to submit; this caused the first wave of the backlog to begin. They eventually split the application onto two servers; you can see even now that they suffixed /dealer/ as a URL path to the php pages, indicating which components are being served from the hastily added new server.
The initial backlog was magnified in the second wave, as the site has a horribly counter-intuitive user interface, meaning dealers were submitting large documents multiple times for each form page. The system requires scanned documents to be attached, and of course you can imagine what resolutions might be used by technically-naive dealers.
So the IT systems say that only 40,000 deals have been entered into the system. Only the reality is that well over 200,000 deals have been done, and they didn't realize this because they trusted the metrics. There's a 5-to-1 backlog, only 4 days into the program. Meanwhile, reports surface that a typical dealer says 150 deals were submitted to the site, yet only 30 submission confirmations were received in return, and every single one was a rejection.
Yes, I'd pin this fiasco squarely on the shoulders of the incompetent IT developers who built a crappy system that was totally inadequate for the task (but don't forget the incompetent managers that let it happen, blindly followed broken metrics, etc.). I think it's lucky that this was detected at all; this backlog could easily have gone undetected for months, in which case the program might have been overspent by many times over!
Yes, this story is indeed an interesting Technology tale, but unfortunately the submitter and editor seem to have entirely missed that point.
Building a new car burns-up the equivalent of 50,000 miles worth of gasoline (2000 gallons).
I'm of the opinion that this program is your traditional governmental stupidity. Take tax payer dollers and waste them on subsidizing peoples bad habits instead of trying to actualy force improvement. Think of what these billions of dollars could do for public transportation. However, I lack sufficient justification to make a strong case. If you've got something other than your memory to back up those numbers I'd love to see it.
Bureaucracy expands to meet the needs of the expanding bureaucracy.-Oscar Wilde
(Obama was in the top 3 as well [quite the coup for someone who has not been in politics that long]).
Obama received record donations across the board. Since political money is grouped by employer, a side effect of this is that he appears to be one of the top recipients of money from every major corporation. Yet for some reason, I never hear people saying that he's a shill for the University of California (his largest 'donor'). And for the record, if you compare the per-capita employee donations for Fannie and Freddie to the per-capita donation for the U.S. as a whole, you'll find that it's a factor of two less. I'm tired of correcting this fallacy, and I get the impression I'm going to keep seeing these asinine comments until 2012.
I hear that the export market for clunkers from Mexico is picking up nicely...
Excuse me, but please get off my Pennisetum Clandestinum, eh!
Mod this guy informative if nothing else.
If these cars were going toward recycling it would be one thing, but destroying many of the perfectly good parts just to prevent it being sold as a used car later on is incredibly wasteful.
Bureaucracy expands to meet the needs of the expanding bureaucracy.-Oscar Wilde
$1,000,000,000 / $4,500 / 7 days = 31,746 cars sold per day
The average number of new cars sold in the US over the period from 1999 through 2006 is 22,156 (according to Ward's, Motor Vehicle Facts & Figures 2007 (Southfield, MI: 2007), p. 22)
To burn through a billion dollars in one week, when the global auto industry has had one of the absolute worst years on record should make major headlines.
"Sales figures through roof as result of C.A.R.S. program"
"Auto makers sell record in record numbers, in excess of 31,000, surpassing the historic average by 25%"
Even at $800,000,000, they would need to sell in excess 25,000 vehicles - EVERY DAY for ONE WEEK to make the numbers work.
There's a hole in my bucket, Dear Liza, Dear Liza..
You think like a ReThuglican Jew
Look at The Big Dig in Massachusetts. A 1985 estimate placed the cost of The Big Dig at $2.8 billion ($6.0 billion adjusted for inflation as of 2006), and yet $14.6 billion ($8.08 billion in 1982 dollars) has been spent on the project since 2006.
I think you've forgotten that they were acting on behest of the Congressional mandate to "sell more houses to the poor,
bullshit.
the CRA was against "red-lining", denying people loans based on GEOGRAPHIC AREA rather than actual credit history.
They were penalizing otherwise responsible people for NOT being pretentious and opting to live in areas most people snubbed.
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If these people stop spending, then by golly, we need to give them more money so that they can KEEP spending DAMMIT!
I know you're being sarcastic, but that's exactly what they're doing. And for the right reason.
GDP = C + I + G + (X - M).
Gross Domestic Product = private consumption + gross investment + government spending + (exports - imports)
Private consumption is down. Gross investment is down. Exports are down. Imports are down. What does that leave?
This program is spending government money to create economic demand. This creates economic activity which helps sustain and grow the overall economy. Yes, it costs a buttload of borrowed money. But in the long run, to NOT have that demand keeps the overall economy in the shitter, and that costs everyone more in the long run than the program's initial cost. Same goes with the stimulus package.
People have used the medicine analogy. If a homeless guy gets sick, you can let him die OR you he can borrow money for medicine so that when he recovers, he can pay you back. He may have little money to begin with, but if he's dead, he's useless. From his perspective, it's better to spend the money to recover and then he can deal with his debt. Programs like CfC and the stimulus programs are expensive medicine (and we may not yet have taken enough of it), but they are necessary to keep the patient alive.
Now is a time where we have to (borrow so we can) spend a lot of money at once in different areas of the economy to prevent the entire system from collapsing. It seems to be working. The economy sucks, but we're not in a Great Depression II as we would have been otherwise.
and take hundreds of thousands of people down who are innocent of any wrong-doing and would have virtually no recourse.
There is no slavery in the U.S. When you see your company engaging in reckless and/or corrupt behavior that can not sustain it over the long term LEAVE. Go get another job. That's what you are entitled to do.
That your 'solution' is 'regulation' isn't surprising. You want a managed economy. "The new Five Year Plan guarantees we will build 15,000,000 new tractors, and the output from the potato sector will liberating. On with the people's revolution."
This wasn't a bad idea in general, just badly implemented. What they should have done is offered this incentive to anyone buying a model that meets a 30MPG rating from the EPA as it would have included Used Cars. Doing it this way would result in more guzzlers being pulled from the market and being sent to the scrap yard where they can then be recycled.
Mod me up/Mod me down: I wont frown as I've no crown
The Gov't and people in general would get a LOT more sympathy on this if the requisite mpg weren't so low. I'm a really frugal person. I am at present driving a 1995 Buick. It (Of course!) doesn't meet those standards. In fact, going back through - NO Buick Lesabre - a standard 4 door sedan - is at or below the 18 mpg ceiling from 1985 onwards. I admit some of this is just me being bitter, but it certainly seems like a reward of excess to some degree. After all why buy a 4 door car for a family of four when you can buy an extended cab pickup? Sidenote: To the ***** who bought a hummer and can still make use of this "promotion" - I hate you.
If you don't like the rebate program, just wait for health care reform designed by the same folks. I'm so excited I can hardly wait.
Why is there an "insightful" mod and why isn't it "-1"? If I wanted insight, I wouldn't be reading
They don't keep junk cars for long anymore, the field of half stripped rusting junkers is mostly a thing of the past.
But they do strip all sell-able parts before shipping the shell to the scrap yard.
It's called a 'for profit business'.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Hi Government, Can I get a $4500 tax rebate to buy a Titanium bike with a trailer? I can cut the emissions to zero if I quit eating energy bars during trips. Thanks
Burn FAT not OIL
A tax credit for large vehicles was created in the mid-1980s to help farmers and small business owners purchase trucks and other large vehicles needed for hauling. But anyone who is self-employed could apply for the credit and any vehicle weighing more than 6,000 pounds, including large SUVs and Hummers, which get 8 to 13 miles per gallon, could qualify. Originally the amount was $17,500. But soon the amount grew. As the tax credit limit has increased, so did the number of claims.
6 or 7 years ago congress passed a tax bill, as proposed in President Bush's economic stimulus plan, that offered a $100,000 tax credit for business owners who purchase large vehicles.
Not all these vehicles purchase with with huge tax payers subsidy, can now be replaced with help from tax payers.
Both programs were bad ideas. The growth of the SUV market was largely due to these hand-outs. It also perverted the market and may be partially to blame for our auto industry failure.
Without government bailouts, the worst a private company can do is to piss away their own money (and that of their clients who have hopefully done their risk-management homework) and go out of business.
When the government screws up, you pay them a trillion dollars at gunpoint so they can try it again.
But the problem is that these private companies have huge debts with each other. So if a few big banks/insurers go, they all go. The regular economy is hugely dependent on the banks, so they will crash as well. We would lose much more money in the long run. Look at the Great Depression.
This Cash for Clunkers isn't really about getting old cars off the road, it's about getting new cars out of the showrooms, where they've been sitting unsold for quite some time. It's about stimulating the auto industry, and getting sales moving along. Note that you can't trade in your old clunker on a perfectly good 2-4 year old second-hand car, it has to be new.
Here in Australia, the Government had a similar scheme, although it worked differently, the end result is the same. It was called the Small Business Investment Allowance. If you purchased a capital asset for your business, you could depreciate an extra 50% of that asset in the first year you own it. This applies to motor vehicles, but only if they're brand-new. Not even an ex-demo car that a salesman has driven home in a couple of times, it has to be new.
I took advantage of the situation and got a turbo-diesel VW Golf, and I've halved my fuel bills.
Specialist Mac support for creative pros, Melbourne
I'm sure that many are very proud of themselves because the government was so inefficient in determining how to run this program that they ran out of money in a week. Had anyone sat down for a few minutes they would have known that the number is easily closer to 4 million cars to sell under this program.
But the Austrian Economists are screaming at this program because of the distortions is applies to the economy. No one is saving money by doing this, they are going into debt, albeit at a discount. And all this money is coming from some other sector of the market that will now suffer a multi-billion dollar loss. Resulting in more industry crisis and bailouts as we chase down the Forgotten Man and try to provide reparations.
This is yet another horrible idea pushed out by horrible government who have short sighted views of not what is best for the economy and this nation but what is best for them to get re-elected in the next couple of years.
Without removing the Federal Reserve, Fractional Reserve Banking, and returning to the Gold Standard we simply must repeat these boom/bust cycles until the currency collapses and everyone loses all of their wealth. At least those who fail to convert to harder assets or assets in another country.
force improvement
Heh, in whose opinion?
wouldn't it be better if the gov simply coordinate all the production and distribution of cars? without all the silly indirect 'incentives'. actually let's do that for all the goods and services. we'll never have any economic instability, unemployment, or shortage of stuff. how come nobody has every come up with such an obvious idea?
Any amount of money will work for an economy. Any. Money is a good like anything else, subject to supply and demand.
Say there is $100.00 in commodity-backed dollars in an economy. In the beginning, a loaf of bread is 10 cents, and apples 14 cents. The amount of money is constant as time goes by, but the number of loaves and apples have doubled. Thus there are more food items competing for the same amount of money, and the price per food item falls, perhaps to 5 cents a loaf and 7 cents per apple. This is deflation in action.
Don't let the word scare you; gentle deflation caused by normal market forces is nothing to fear, and happened with no ill consequence throughout much of history. It means that money will become more valuable over time, thus encouraging savings, which actually good for an economy. By being rewarded, through deflation, for putting off immediate consumption for future consumption, the market achieves a viable and natural balance between producing immediate consumer goods, and long-term, capital-intense, activity.
However, when money is printed to (unnecessarily, as we have seen) 'stabilize prices,' sustainable economic development is disrupted. Interest rates would normally be set by the amount of money in savings in a society. If people have opted for near-term consumption, there is little savings to be loaned, and the cost of borrowing that money (interest rate) is higher. Correspondingly, if there is ample money in savings, interest rates are low, and industry is thus encouraged to embark on long-term, capital-intense developments. Artificially fixing the price of money (i.e. setting the interest rates arbitrarily 'for everyone's own good') means that extra money must be printed to cover the loans, devaluing people's savings.
Thus industry starts endeavors that seem viable only because of interest-rate fixing, but are soon enough revealed to be malinvestments when there is a wave of business failures by otherwise-competent businesspeople. Not only are these new endeavors not actually called for by the economy-at-large, there is a corresponding loss of wealth when labor and capital are put into such quagmires. By 'stimulating' the economy instead of letting bad investments be purged, these malinvestments are masked and become the foundation for evermore inefficient economic development. Eventually economic growth trends to zero as the economic inefficiencies multiply, as has happened in the U.S.
Thus, any amount of money will work for an economy, and increasing the money supply because 'money becomes scarce' by printing money actually CAUSES the boom-and-bust cycle and only benefits the politically well-connected special interests who spend the money first, at the expense of everyone else. Money backed by a commodity can keep devaluation at bay; only though sound money can one have real, sustainable economic growth.
Captcha: silvery
Giving away taxpayer money causes inflation. The inflation is not only in the dollar generally, but also in the price of new cars. Those who focus on the free taxpayer money they are getting may not realize that the dealer has raised prices.
Actually, giving away taxpayer money only causes inflation if the money supply increases. If you have people on the other side not paying loans back, that money created by fractional lending is effectively destroyed and the real money supply contracts. Since so many people are simply not paying loans back, dropping tons of money onto the economy isn't going to have an inflating effect.
This is my sig.
Republican bitching about GM is a total fraud.I keep hearing so-called conservatives moan about GM and the how the government shouldn't have bailed them out. They talk up the free market as if they believe in it and the truth is, they don't. The very same conservative movement that rips the northern based GM has absolutely no problem lining up to the government dole when it comes to protectionism for American food products and subsidies for American farmers. Jeff Sessions, Republican, publicly ripped GM so much, and defended Honda and Toyota so much, that, I went and made a Japanese style state flag for his home state of Alabama....:
http://www.treatyist.com/issue1/alabamasnewflag.aspx
Pretty much, Republicans have movie stars doing "Got Milk" advertisement, "Beef, its what's for dinner...".. like, the USA needs to have the government advertising fucking food. Every year American farmers get the same out of amount money that GM gets, in either direct subsidies or benefits from protectionism, and THAT, of course, based on most conservatives that I talked too, is somehow "different."
Moral of the story is this, Republicans have no credibility on balanced budgets, no credibility on economic national security, and no credibility on nationalism in general. If the GOP wants to regain its self respect, then red states must balance their budgets, and get off the federal dole themselves.
This is my sig.
- Now today that same suit still costs about quarter-ounce of gold, but 300 dollars paper money.
Except that, these days, a person would have multiple suits, all sorts of clothes, a couple of cars, more food than you can possibly eat, houses that are quite frankly beyond anything all but the richest in the 1920s could have dreamed of, video games, air conditioning, TV, and more.
Because of this, you could make the argument that the 300 paper dollars is worth far more than the 5 paper dollars was in the 1920s.
All of that was made possible because when you have fractional reserve lending, you create pools of money that can be invested in the creation of new products. If we had to wait for someone to dig up gold, we'd be worthless.
What goldbugs never fail to appreciate, is that gold doesn't have anymore "natural" value than paper money. Gold's supposed value is just as much fiat as paper money is. Whether you declare your money to be based on gold, based on paper, based on apples, or oranges, or an entire economy, money is always going to be fiat. The only non-fiat money this country had was the bank notes of the late 19th century and that turned out to be a disaster.
What the hell is gold actually good for? At least a dollar can help me light a fire or wipe my ass with it. Can't do that with gold. Gold's a terrible metal to make stuff with.. its too soft. All it is kinda shiny. But who cares about a kinda shiny rock when you have LCD screens that shine way more.
This is my sig.
This is why I didn't mess around with my Cash for Clunker deal.
Last February, my 1999 Town and Country minivan was totaled by a serious fender bender / mild accident. I got about $5k from the insurance after opting to keep the drivable yet ugly car for $250. I then drove it around for a few months until the bearings started doing funny things, and I could tell that it was getting no longer safe to drive.
Long story short, a friend told me about the CARS act, so the second it was signed into law I decided I was going to go for it. Figuring that the program might run out quickly, or it would be difficult to find the car that I wanted during the rush, I found a local dealership that was pre-selling cars (ie, taking deposits, getting the car on the lot, etc..) in early July, and put a $500 refundable deposit down on a new Toyota RAV4.
Only the evening of July 26th, I drove my potentially unsafe (yet still insured, for the record) minivan over to the dealership in the middle of the night. Monday morning I walked in and got my new RAV4 (which was already on the lot, with all the paperwork done) with my $4500 credit. I'm very happy, since there is no way I would have been able to afford a new car without the program. It's also pretty damned amusing that I got nearly $10,000 (insurance+CARS act credit) out of a minivan that probably wasn't worth more than $4k before the accident.
There is only one real difference between public and private management of the economy: The government is, at least mildly,ACCOUNTABLE.
I don't know what government YOU'RE talking about, but surely it cannot be the US government that can simply refuse to comment and reasonably expect every news station to instead report on where Michael Jackson is being buried (breaking news: OR MAYBE HE ISN'T!!!).
1987 Plymouth == so dirty it's banned from sale within the U.S. (except as an older used car)
With all due respect, was there any chance of anyone selling 1987 Plymouths in a form other than an older used car?
Ask Me About... The 80's!
This is a textbook great stimulus program. Glad congress approved another $2B. Quick stimulus spending and helps one of our main progressive goals for increased automobile fuel efficiency. It's clear that this program will be continued well beyond the the $3B level. After several months of not seeing new car plates around town, I've seen 50+ new plates in the last month in San Diego. It's working!
There is no stimulus in the CARS bill.
The major American automakers (and I use that term loosely) STILL HAVE STOCK OF 2008 MODEL YEAR CARS.
The 2010's are due out....and they haven't even sold off all the 2008's yet!
Just go to GM's website and look at current offers for your area - at the back of the list are all the deals on '08s.
This stock was generated because of the sweetheart deal the unions had over GM - even laid off, union employees of GM make 95% of full-time salary. So GM just never stopped producing cars. It doesn't make sense to - your biggest cost (labor) still hits you.
This is just back-stock being purchased now. It will create no new production, because there's still a looooooong way to go to sell off all the backlog and clear out all the parking lots in/around Detroit.
the worst a private company can do is to piss away their own money (and that of their clients who have hopefully done their risk-management homework)
And given how many people got fucked out of their retirement savings, I'd say the percentage of those "clients" that you describe is decidedly low, because the market got waaaay too fucking complicated, and the experts had their heads too far up each other's asses to see what was really going on.
Seriously, if *really* believe that "the worst a private company can do is piss away their own money", you're too fucking stupid to take part in this conversation.
and take hundreds of thousands of people down who are innocent of any wrong-doing and would have virtually no recourse.
The innocent parties in the current meltdown being...?
I'm bating you, of course, because there are none.
You're probably paying attention to the CNW "junk science".
To quote from http://www.pacinst.org/topics/integrity_of_science/case_studies/hummer_vs_prius.pdf:
Another example of an unusual assumption and choice of data is the reported distribution of energy across the different phases of vehicle life. The CNW results suggest that the majority of energy is consumed during the production of the vehicle. These results are at odds with every other study weâ(TM)ve seen on the energy life-cycle costs of automobiles. Other studies independently conclude that the vast majority of energy is consumed during âoevehicle operations,â with lesser quantities used during materials acquisition, fabrication, and vehicle disposal. For example:
â A report produced by a British research firm concluded that more than 90% of all energy used in the motor industry went to vehicle operation; less than 10% went to manufacturing and production.
â The British auto industry trade group estimated in their 2006 sustainability report that life cycle CO2 emissions â" a strong proxy for energy â" are allocated 10% to manufacturing; 85% to use; and 5% to disposal.
â The Center for Sustainable Systems of the University of Michigan, which pioneered and refined the tool of life-cycle assessment, conducted a joint project with Chrysler, Ford,General Motors, the Aluminum Association, the American Iron and Steel Institute, and the American Plastics Council. They analyzed the life-cycle energy costs of the 6 systems, subsystems, and 644 discrete parts and components composed of 73 different materials comprising a typical North American mid-sized car and concluded that more than 85% of all energy is the result of using the car, not making, assembling, repairing, or disposing of it.
â A comprehensive energy life-cycle analysis of a Volkswagen Golf Mark 3 concluded that 73% of total energy is consumed during the use and disposal phases, 11% in materials production, 8% in vehicle manufacturing, and 8% in fuels manufacturing.
â The MIT study, âoeOn the Road in 2020,â reported on a comprehensive energy life-cycle analysis and found that 80% to 90% of all energy was used in the operation stage; 7% to 12% in the materials production stage, and the remainder in vehicle assembly, distribution, and disposal.
â A 2006 study from Argonne National Laboratory concluded that around 75% of all hybrid and internal combustion vehicle energy use comes from the operation of the vehicle. The rest comes mostly from producing the fuels and the manufacture and disposal of the vehicle and its materials.
It goes like this...
Can you get a loan to buy a house? Yes... but only if there is more demand for housing than there is supply. Remember, supply and demand determine value... A bank isn't going to give you that loan if the future value of the house is certain to be lower than the current value.
So, if there are ever enough houses for everyone, they will become valueless because the demand has been satisfied. There is no profit then to be found in housing. Basically, under our economic system, this can never be allowed to happen because there would be no profit the loans are never made. The houses are never built. This is why there is (and must always be) still homelessness, poverty etc. This is also why fashion exists. The key irony of capitalism which purports to be a way of satisfying needs is that the needs must *never* be satisfied.
So... Our money... Paper money makes up only around 5% of all the money which exists. The rest, the other 95% is "borrowed into existence". You go to a bank and get a loan, they *create* $NNN,NNN worth of credit and loan it to you. The bank expects you to pay interest on the loan debt. They expect profit.
What if ... Money was created without debt and interest attached?
What if you had to pay a penalty for hoarding money, rather than being rewarded for it?
Our worldwide society is defined by the monetary system which we use. Why do you think that we have huge multinational corporations? "progress"? Why? It's because organizations *must* grow to service their debts + interest. They have to keep getting bigger and bigger or they will fail.
Deleted
The innocent parties in the current meltdown being...?
I'm bating you, of course, because there are none.
Oh, so the person trying to buy the house now that would have had no trouble 10 years ago, but is having trouble now because of overly restrictive lending practices as a reaction to the meltdown are not affected? How about those that bought general mutual funds with no say in their investments who owned a slice of failing financial institutions? Or, less innocent, people that have ARMs that would have been a better investment if the rates weren't fluctuating as a result of the turmoil? The homeowners that own their home outright and want to sell it who would get less this year than last because of the decrease in values as a direct result of the meltdown? There are a number of complete innocents that will be negatively affected in some way. Yes, the greater the involvement the greater the effect, but that doesn't mean there exist no innocent parties.
Learn to love Alaska
For along time I have mentioned instead of giving any bonuses to the companies involved in making a mess of our economy (yes you GM)...they should have given car buying incentives, meaning that not only would the companies benefit, but also the people.
Give the incentive to the people, then they go buy a car, and then the companies make a profit. Everybody wins...but did they
think of the people, no, they never do!
My one complaint with the wording of the program is that they didn't just say 'if the car you have gets 10 mpg less than the one you are buying, you qualify for the program.' Instead they limited it to your car has to get below 18 mpg and the car your are buying gets at least 10mpg more. There is a limit to how much improvement we can make in fuel efficiency and I don't see why we shouldn't open up the program to everyone for all time. Admittedly the improvement gains are felt more at the beginning of the program, but I appreciate the fact that the program has a limited life span because of limits on improving fuel efficiency.
"Only one thing, is impossible for god: to find any sense in any copyright law on the planet." Mark Twain
One could argue that the _current_ restrictive lending processes should be the norm - so if you can't buy a house now you shouldn't have one.
Why would you buy a mutual fund without an expectation of risk? How is losing money you essentially gambled on the stock market out of the ordinary? People sometimes in fact often lose money in the stock market. Again, the norm.
ARMs were a spectacular investment at some points. I bought one 5 years ago, a 5/1 ARM. It just readusted from 4.375% to 3.8%. ARMs weren't the problem, exotic loans including exotic ARMS and overextended ARMs were the problem.
Homeowners who own their home and get less for it overpaid for their home or expected too much profit from it. In addition, they will be able to purchase a new home for less and the person buying their home gets a better deal.
No innocents, this is business as usual. You rolls your dice and you takes your chances.
Don't get me wrong, I'm far from perfect - nobody is perfect. I've made mistakes and learned a lot through the last few bubbles and hopefully other people have too. I doubt it, though, as Nanny govt steps in to help and people have short memories.
I saw what I think are two logic problems in your post.
First, we're not talking about Cheesy Poofs vs Cheesy Poofs. We're more like talking about Cheese and Pasteurized process cheese product. Like it or not, a SUV has abilities that a Sedan doesn't. For that matter, bigger vehicles have benefits over smaller ones - capacity, if nothing else.
Second, while the savings aren't as big of a deal for an individual, it does become important when you're talking about a government program - where you have to realize that getting somebody out of their 18mpg truck and into a 22 mpg truck (because they actually require a truck, even if only in their mind), is better than getting a dude out of his 30mpg sedan into a 36mpg mild hybrid. So any subsidization program that wants to actually save the most gas for the dollar will look to get the efficiency of the trucks up first.
Which is why I've always wondered why we get such tiny hybrids - there's a lot more money to be saved putting hybrid systems into larger vehicles like UPS/Fedex trucks and busses than compact cars.
If you care about your money and your planet, you'll pick the highest-mpg vehicle that suits your need.
Problem, highest mpg != to most economic, especially when you look at hybrids. Depending on your driving habits, it's quite possible that the hybrid, despite having a higher mpg, won't pay itself off faster than the vehicle will wear out, or statistically be taken out by a crash.
I don't read AC A human right