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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.
Cheers
Yes. I would trade-in my old 1987 Plymouth to upgrade to a Volkswagen 50mpg Diesel (Jetta/Passat), but unfortunately my car doesn't meet the strict qualifications. Which I find funny. If I had an old 17mpg pickup I would be allowed to get a 19mpg SUV and get the free congressional money, but an upgrade from an old 80s pollutemobile to a new technology car that gets twice the MPG and is about one hundred times cleaner* is verboten.
Yet more government illogic and inefficiency.....
That's the same kind of illogic that allowed businesses to buy SUVs and then write them off their taxes (during the Bush years). I expected such things from the SUV-loving Republicans, but not from the Green Democrats. I expected the Democratic Congress to pass a bill that encouraged more high-MPG carss, not just an excuse to trade one gas-guzzling truck for another gas-guzzling truck.
Oh well.
*
* Jetta Diesel == ULEV (ultralow emission vehicle)
* 1987 Plymouth == so dirty it's banned from sale within the U.S. (except as an older used car)
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
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.
Building a new car burns-up the equivalent of 50,000 miles worth of gasoline (2000 gallons). And if that new car uses an exotic technology like hybridization, then it burns even more energy to build the battery. This is because you need to burn fuel to drive the bulldozers or chisels that mine the metal or rubber, the fuel to move the metal/rubber to the factory, and energy to melt the metal/rubber/plastic into useable products.
Driving an older car is better for the environment (saves 2000 or more gallons), and smashing an old car truly is the equivalent to smashing windows just to "make work". The only time upgrading makes sense is if the old car is belching smoke, but as long as it keeps passing State Emissions Tests then it's cleaner than buying new.
It's especially a waste to destroy all the parts.
Those nuts/bolts/radiators/et cetera should be recycled into repairing other cars, but instead Congress chose to destroy them. Tehy are following the old "throwaway" paradigm rather than the greener "reuse" philosophy. Bad, bad, bad policy.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
I agree with most of what you are saying, assuming you are being sarcastic about the fiscally conservative part. It's sad that we seem to have no fiscal conservatives serving us, and those who are supposedly fiscally conservative want to keep extending this wasteful program. I myself drive an old car, with many, many miles on it. It actually gets pretty good mileage (about 30mpg), but I'm sure it's considered dirty, because it's not OBDII.
It makes me wonder, with all this "saving" of the environment we are doing, how much are we wasting resources, money and time, and how much pollution is in fact produced when we personally buy a new car rather than fixing an old car or continuing to maintain it. In the time that my car has served me, others would buy as many as 3 cars.
I'm all for that, as long as that's what the market allows them to do. But subsidies are ridiculous and wasteful on many different levels.
The brains of a chicken, coupled with the claws of two eagles, may well hatch the eggs of our destruction.
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.
No, this is not what's driving the recession. What's driving the recession is that the amount of debt in the economy, especially the American economy, has reached critical mass. You really need to start reading some blogs like The Market Ticker, Mish's Global Economic Trend Analysis, and Zerohedge to get a true picture of what's going in the economy.
As for this particular "cash for clunkers" program, all it's doing is pulling forward demand for new vehicles. It will cause a short-term rise in demand now, but once the program expires or runs out of cash again, that demand will vanish and there will be nothing to replace it. Sales will have to return to their previous level or even go lower, as the people who buy new cars under this program certainly won't need to do so again for a few years.
At the macro level, all the debt in the system has produced a similar effect. All the demand, all the growth we've seen for years now, has been fuelled by debt. The debt just can't grow any more; everyone's maxxed out and now trying to pay it down. There's so much debt out there that clearing it out is going to be a long, painful process, and during that process we'll be lucky to stave off an outright market crash, let alone actually return to a growing economy.
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?
Never. It takes vastly more energy to produce a new car than the car will ever consume. Even thirsty old Volvo 240s will be thundering away well past the end of their 22-year design lifespan, still consuming 24mpg and *still* nowhere near the amount of energy it took to make them.
Even the more far-out wacky environmental groups are agreed on this - it makes no economic or ecological sense to keep churning out new cars that are only a tiny bit cleaner than the old cars they replace, taking ten times as much energy to produce.