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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.
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.
Actually no, they pour some chemical into the engine of any car traded in on this program. This chemical ruins the engine and makes it impossible to use. They then crush the car for scrap.
There will not be one used car from this program on the road after it is traded in.
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.
VLC FOR MAC IS DYING! IF YOU DEVELOP, PLEASE SAVE IT!!
I hate how in this whole auto debate everyone seems to ignore the Toyota plants in Kentucky and Michigan and the Honda plants in Ohio and Alabama. The Honda plant in my hometown directly or indirectly employs probably a third of my neighbors.
Moreover, both car companies are publicly traded in the US. I have some friends who have made a killing on Toyota stock in recent years.
Yes, GM is owned by America, and its American operations are bigger, but the car companies that actually make good cars are making a fair number of them here, too.
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.
Then what I don't understand is that all of the car that are traded in, go straight to the car crusher.
The entire car isn't crushed; the only requirement is that the drive train be destroyed. The recommended method from the feds is to drain the engine of oil, fill it with some sand, and turn it on. The rest of the car is sent off to the parts yard.
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.
Your math is wrong, though it's not entirely your fault... mpg is a terrible measure of fuel economy because it is a non-linear scale. Convert everything to gallons and it will all become clear.
100 miles in a 17 mpg car is 5.88 gallons
100 miles in a 19 mpg car is 5.26 gallons
So trading from a 17 to a 19 mpg car saves you and the earth 0.62 gallons.
100 miles in a 25 mpg car is 4.00 gallons.
100 miles in a 28 mpg car is 3.57 gallons.
So trading from a 25 to a 28 mpg car saves you and the earth 0.43 gallons.
Lesson: don't simply look at the MPG of a car - do the math and see what you really save. You'd be shocked, but switching from a 34 mpg car to a 55 mpg car won't actually save you very much in gas...
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
The people who really need this program as the poor driving old clunkers, but they can't afford the new car or secure the financing for the new car (even after the discount). So the effect is that the most of the people taking advantage of this are the middle class, who are trading in older, but perfectly servicable vehicles, as part of the program. The "clunkers" name is a lie - many of these vehicles are problem-free, and feature functional modern safety and emissions systems. Many of these are families doing a "swap" - most families have a large family vehicle and smaller 2nd car, so trade in the old family vehicle for a new smaller car to get the voucher, then turn around and trade in the old smaller car for a new fuel-inefficient family vehicle.
Many people don't know what happens to the old vehicles either. The program requires that they be disabled on the dealers' lot, or face a fine. The prefered way of doing this is to drain the oil and pour a sand solution into the engine and run it to it seizes. Youtube is full of videos now of this procedure being done to these "clunkers":
http://www.youtube.com/watch?v=qjBilHH5z2A (late model Jeep Grand Cherokee getting destroyed)
http://www.youtube.com/watch?v=c-ZP6aG2xl0 (Rather nice looking Oldsmobile Aurora gets trashed)
http://www.youtube.com/watch?v=eOEqJIGnXRw (Late model Chevy Blazer/GMC Jimmy getting destroyed)
http://www.youtube.com/watch?v=4OhW9u9R49w (Nice looking Dodge utility van, apparently they just drained the oil on this one)
If you love cars, please don't click on these links:
http://www.youtube.com/watch?v=j3qXvDDhUpE (BMW 7-series getting destroyed)
http://www.youtube.com/watch?v=waj2KrKYTZo (late model Volvo S80 with the turbo option and Satellite Nav(?) getting destroyed)
So not only do these cars have to be scrapped, to add insult to injury, when the scrap yards get them the most valuable part of the car (the engine) has been permanently ruined. So as far as I'm concerned, this program is nothing more than a disgusting waste of a lot of perfectly good vehicles in some kind of bizarre bailout for the auto industry by using taxpayer dollars to buy new cars for people who don't need them, and removing perfectly good vehicles from the used car market. There is nothing green about it at all when you consider the environmental costs of replacing these non-clunkers with new vehicles and recycling the carcass.
(as a note, I'm particulary pissed about that Volvo... it's a nicer car than mine, not that my car is a bad car - but I can't trade it in for a voucher even if I wanted to because it gets 22MPG and now I get to watch nicer cars than mine get destroyed with my taxpayer dollars. As far as I'm concerned, the program running out of money is a good thing)
The new vehicle has to be at least 4mpg more efficient for the 3500 rebate and 20mpg more efficient for the 4500 rebate.
(Not that I agree with the program in the first place)
Your argument is a form of the broken window theory.
I won't argue the merit of your case, but you are confusing the parable of the broken window with a sociological theory which alleges to describe the positive effect that ameliorating environmental blight can have on curbing negative social interactions (i.e. that fixing broken windows can reduce crime).
The problem with statements such as this is that they betray a fundamental lack of understanding of what "money" is. So, let's start at the beginning, in the hope that we can clearly understand what the true problem is.
We start from first principles. Let's assume for a moment that you are a farmer and I am a hunter. I want some of the bread that you make from the grain that you grow and you, in turn, want some of the meat that I have. We agree to a mutually-acceptable exchange: In return for your bread, I will give you meat, at an agreed-upon ratio.
This works for we two, and we're both happy with the arrangement, deeming it fair and equitable.
The problem, of course, is that such a system doesn't scale well. As the population increases, and other goods and services enter into the equation, simple barter becomes awkward and cumbersome. If I have the pelts from the animals that I kill, but no meat to spare, and you don't want them, lacking the skill, means or desire to turn them into clothing, for example, I cannot use them to obtain bread from you as they are not of value to you for such an exchange.
So enters into the equation the idea of using a common medium of exchange, which we'll call "money". In the beginning, it's something of universal value - coins, perhaps, made from metals that are sufficiently difficult to obtain in their own right so as to forestall just anyone from doing so, and thereby insuring that they will retain their value as such for awhile. Everyone agrees (for the most part), that this is a superior solution to barter, all things being equal (which they seldom are, but, we're just spinning a tale here, so it doesn't matter if our view of this fictional world is through rose-tinted glasses).
Now, instead of seeking to exchange my pelts for your bread, I've coins to do so: I sold my pelts to a tailor in exchange for them and so can obtain the bread that I want from you at a mutually-agreed upon rate.
You, in turn, take those coins and use them to purchase what the tailor has fashioned from them, a warm coat and some boots, perhaps.
Fast forward a bit: Time passes, the population grows more and more, and supply of goods and services outstrips the availability of money with which to exchange such. Trade suffers, people can't buy what they want, nor sell what they have, nor provide services: Money is scarce (By lack of the source materials, or perhaps by hoarding and manipulation - greed raises its ugly head).
Someone realizes that one way to correct this, is to change from using relatively rare metals for coins, to something that is easily created, script money - or, paper that, while having no inherent value unto itself, can nonetheless be used in place of them, so long as everyone agrees to it.
So, by the power of law, everyone does, and things get better, prosperity ensues. Until, of course, a few people get greedy. They realize that the key to riches isn't in the goods and services, but rather in the medium of exchange for such. Since everyone has agreed to use money to exchange them, and since there's next to no cost to create it now, why, all they have to do is get complete control over it.
That's where the Federal Reserve in the US, and other such institutions around the world enter into the equation, and also where ideas such as "fractional reserve banking" come into play: It's all about control over money now, because money is power.
And over time, money became not a simple medium for the exchange of goods/property and services, but something of value in its own right, while having no equivalent cost. That's also where things such as stock exchanges come from - just another fiction that everyone agrees to, which are useful, but another venue that the greedy can manipulate.
So, over time, there's a reversal - the economy is no longer fundamentally
Wow, what an insightful post.
If you haven't already seen it, take a look at Money as Debt, which expands on what the parent said in a 45 minute video. Good (and scary) stuff.
It's better to vote for what you want and not get it than to vote for what you don't want and get it.
- E. Debs
If the new vehicle is a category 1 truck that has a combined fuel economy value that is at least 2, but less than 5, miles per gallon higher than the traded-in vehicle, the credit is $3,500. If the new category 1 truck has a combined fuel economy value that is at least 5 miles per gallon higher than the traded-in vehicle, the credit is $4,500.
A category 1 truck is a nonpassenger automobile. This category includes sport utility vehicles (SUVs), small and medium pickup trucks and small and medium passenger and cargo vans.
A category 2 truck is a large van or a large pickup truck, based upon the length of the wheelbase (more than 115 inches for pickup trucks and more than 124 inches for vans).
Now, I copied that from the FAQ, but I actually looked up the relevant section in the law as well:
the term `category 2 truck' means a large van or a large pickup, as categorized by the Secretary using the method used by the Environmental Protection Agency and described in the report entitled `Light-Duty Automotive Technology and Fuel Economy Trends: 1975 through 2008';
and then the EPA report (which explains the classification method in Appendix A)
The truck size classification scheme used in this report is based primarily on published wheelbase data. For cars, vehicle classification as to vehicle type, size class, and manufacturer/ marketing group generally follows fuel economy label, Fuel Economy Guide, and fuel economy standards protocols; exceptions are listed in Table A-3. The classification of a vehicle for this report is based on the authors' engineering judgment and is not a replacement for definitions used in implementing automotive standards legislation.
An old 17mpg pickup might very well be a category 2 truck, but even if that were the case, every SUV is category 1 truck regardless of size (even the Yukon XL--that was the one I checked--the EPA report wasn't terribly helpful there. This legislation seems awfully slipshod...).
Thus, by buying a 19mpg SUV to replace an old category 1 or 2 truck, you would in fact become eligible for a $3500 worth of 'free congressional money.' To get the full $4500, you would need a 5 mpg improvement (i.e. a 22mpg SUV).
Now, if you wanted to instead replace an old (big) category 2 truck with a new (big) category 2 truck, then the new truck would need to be 1mpg more efficient for the $3500, or 2mpg more efficient for the $4500.
The SUV classification standards are pretty hilarious as well. Here is the explanatory language in the rule:
The term "passenger automobile" and its definition are taken from the agency's fuel economy statute. The definition excludes vehicles that NHTSA has determined are 1) not manufactured primarily for transporting persons and 2) vehicles that are capable of off-highway operation.
So...SUVs are classified as non-passenger vehicles because they are capable of off-highway operation! I'm sure that is a huge use case for all those Escalades. In fact, it goes on to say that currently 2WD SUVs are eligible as well, as long as the model is also available in 4WD, although they are discontinuing the application of that rule in 2011. Someone can try to make the argument that this is at least as stimulating as just giving GM the money directly, and at least lots of people get (part of a) car out of it this way, but arguing that this is some kind of significant environmental program is just laughable.