Slashdot Mirror

← Back to Stories (view on slashdot.org)

"Cash For Clunkers" Program Runs Out of Gas

Posted by timothy on from the spend-all-you-want-they'll-print-more dept.

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.

5 of 594 comments (clear)

  1. Really seems to be working! by tetrahedrassface · · Score: 4, Interesting
    Seems like a lot of folks are using the program to purchase more efficient cars. Funny how the initial billion in funding jump started new car sales, and stimulated the economy in such a large way. If the initial 4 billion was supplied that was initially asked for we wouldn't be having this discussion. I think both sides of the political aisle see that this program is giving tremendous stimulus bang for the buck. I hate to see a lot of tired, old, and rusty cars going to the crusher but the fuel savings nationally should be measurable. Something like 250,000 new, more efficient cars have already moved, and hopefully this will get factory workers back on the line, working, and paying taxes, while preserving some semblance of U.S industrial capability.

    Cheers

    1. Re:Really seems to be working! by rrossman2 · · Score: 5, Interesting

      Yeah, and the big issue is the dealerships/new owners may get screwed. There are a ton of cars yet the dealerships have to process via the CARS system. I guess it can take up to 3 hours per car to actually file the thing. The government ran out of money, and the dealerships still have many, many cars sold under the CARS program they are going to need to get CARS money for.

      Problem is, the government is working at it's finest again. I'm not really for either party, so don't read this as me blaming one side or the other, it's just how it's been reported. The House has passed the extra $2 million, but it still has to hit the Senate. From reports, there's a few Republican Senators who are going to block the bill, or at least try to stall it long enough.

      Why are they going to do this?? I don't have a clue. I understand they may not like the CARS issue, and maybe think it's a waste of money. But that raises a few points. One, it's helped save a lot of small car dealerships, at least for a time now. Two, the money that's been flowing around surely hasn't hurt the economy. Three, if the Senate shoots down the extra money, what's going to happen to the dealerships and new car owners who find out that even though their trade in + new purchase met the requirement of the program, the program ran out of money faster than anyone could believe so now the $3500 or $4500 per car is a no go? The dealership is basically stuck fronting the $3500 or $4500 until the government can get them the money as is. Without the extra influx of money to the CARS program, a *LOT* of dealerships may find themselves holding a *LOT* of $3500 or $4500 "discounts" that will take a struggling business market already and completely trash it.

      Even if the dealerships went after the customer for the extra $3500 or $4500, a lot of them may not be able to afford the extra costs, or may have to sell the car off right away. While this may help the "new" used market segment, the customer is back to purchasing a cheaper, possibly less fuel efficient car to get around.

      All in all, a confusing and maybe not completely thought out program, but with an even more poorly thought out Government Party "I'm not going to support it because it's another parties idea" possible blocking of money.

  2. Re:Fuck you, this is about EVERYBODY by commodore64_love · · Score: 4, Interesting

    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
  3. Re:Everyone Did by optimus2861 · · Score: 4, Interesting

    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.

  4. Re:Fuck you, this is about EVERYBODY by Gordonjcp · · Score: 4, Interesting

    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.