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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."
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.
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
Fuck yeah, man, America! Fuck libraries, fuck GameSpot, fuck buying used things, let's all do the patriotic thing and buy new, new, new! CONSUME CONSUME CONSUME!
"Fiscally conservative" is basically "colluding with big car companies to make more profits?" Guess what? When you buy old cars, you're also putting money back in another American's hands, and you're keeping a useful resource (a working vehicle) from just rotting away.
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.
Buying a car is one of the most patriotic things you can do outside of buying a home
And if you can't afford either of those, the third-most patriotic thing you can do is smash some windows, because that puts money in the hands of the insurance claims processor, the workman who fixes the window, the glass manufacturers, and everyone that they buy from...
I am TheRaven on Soylent News
You can argue about fuel efficiency
And you need to. How much fuel is required to build a new car, and to scrap an old one? What milage improvement do you need to get out of your new car for this to be a net improvement? It's not immediately clear to me that this program is factoring this into account. Unless you know how many miles a person drives per year, it's difficult to make this calculation. You also have to factor in future fuel efficiency improvements. If a car bought next year is more fuel efficient, but takes the same amount of fuel to manufacture, as one bought this year then waiting until next year to upgrade may result in less fuel being consumed in total.
I am TheRaven on Soylent News
the fuel savings nationally should be measurable
That's only true if the cars being turned in were being driven a lot. If retired people are trading in old cars that were only being driven once a week to go to the grocery store, this isn't helping the environment at all. In fact, it is hurting the environment because of the resources that went into manufacturing a new car that was unnecessary. That is why I have always advocated a substantial gas tax -- it creates an incentive to get a fuel-efficient car where the incentive is proportional to the environmental damage (and national security threat of relying on oil from the Middle East) that is actually being done. Further, the people doing damage are the ones that pay a penalty for it. The Cash for Clunkers program is not well aligned with improving the environment, and it rewards people for damaging the environment (i.e. those that bought inefficient cars) at the expense of those that were more responsible, since they will be paying more in taxes in order to pay for the clunkers being traded in.
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.
And making a new car and scrapping the old one consumes no energy at all? How long do you have to run the new car before the amount of fuel you've saved is more than the amount used to build the new car? Before the pollution you've saved is greater than that of putting the old one in landfill?
I am TheRaven on Soylent News
Your argument is a form of the broken window theory. If someone can fulfill their transportation needs by buying a used car vs a new car then the economy will be better off if they buy the used car. Why? Because in such a situation buying a new car 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.
So yeah, buy a used car if you want to save money
Again, that saved money can be spent on other goods and services which benefit also benefits the American public.
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.
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
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.
No, Medicaid covers that particular case. More often, the problem is "Sorry, you're not poor enough"....
"I do not agree with what you say, but I will defend to the death your right to say it"
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.
I do find it comical that this is being floated as a stimulus plan when it seems to be going to foreign car companies.
What is a "foreign car company"? If you mean "a car company that is foreign", consider that the shareholders live worldwide. If you mean "a company that makes foreign cars", consider that a lot of Honda, Toyota, Subaru, and the like have plants in the United States. Is a Toyota built in Ohio by American workers who pay U.S. income tax more "foreign" than a Ford built in Mexico?
the government could help-out by lowering taxes
You must be new here. Lowering taxes gives the government less influence over those who vote for them.
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
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.
- 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.
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