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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."
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.
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
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.
No, the traded in cars go to the car crusher. A really horrendous way of getting rid of the vehicle. Why not just put certain types up for sale to used car salesmen and stimulate that industry as well? The way the US government is right now...it seems to be a good trend. Pass a bill with only a slight idea of what it does, and not reading into the fine print.
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
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.
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!!
Don't worry about being an ass. That's a legitimate claim.
I don't see why the American government couldn't prevent this type of skirting of our laws. Ross Perot mentioned the "giant sucking sound", and while that might be applicable to Detroit, he really meant the migration of American jobs to lower-wage Mexican factories.
If we care about Americans, it behooves us to think about exactly the kind of anti-American job migration that you mention. If you're an ass, then, brother, we're both motherfucking asses.
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
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.
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
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.
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.
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.
Right. That's why the best thing for the economy is for all the money to be stuffed into mattresses, so it doesn't circulate at all.
Oh, wait, no, that's not right. It's the other thing, you know, dead wrong economically. Velocity of money is important and when you're in a credit crunch (which we still are), one key thing is to keep the money moving. It's a lot like oil in an engine. If you "save" all the oil in the pan, the engine locks up and destroys itself.
The Mongrel Dogs Who Teach
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"
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
If Americans truly want to keep those crap jobs here in America, then they should be willing to accept the same wages as a Mexican (a few dollars an hour). It's Americans unwillingness to give-up their $30/hour union jobs for an $8/hour union job that makes the factory closeup and move.
And of course the government could help-out by lowering taxes, so that it's possible to survive on that minimum wage factory job.
"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.
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.
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.
Bu... but.... the car company weasels need your money _MUCH_ more than other Americans do!! How else are the big car companies going to pay off the consequences of the last few of decades worth of really lousy business decisions like colossal over investment in SUV production if not with massive injections of taxpayer money? Why, if we don't do as the industry lobbyists are saying and feed the big car companies lots of tax dollars actually intended for more socially beneficial projects, car companies might actually have to get off their ass and come up with some original ideas. Like designing and manufacturing more fuel efficient vehicles and selling them to the public _WITHOUT_ government subsidies. Oh the horror, the horror....
Only to idiots, are orders laws.
-- Henning von Tresckow
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?
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 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.
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.
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.
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.
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).
i'm in indiana and currently live in a Chrysler town where people will look dirty at you for buying a "foreign" car but I'm from southern Indiana where they recently opened a Honda factory and there people look at buying Hondas as helping them out.
http://www.popularculturegaming.com -- my blog about the culture of videogame players
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
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
Nah, the poor have cars, they just have to stay with their unsafe, polluting old cars because they can't afford to buy a new car and the better used car they would have bought has been destroyed to give GM a handout.
Its the No Airbags for Mexicans Program
If a job's not worth doing, it's not worth doing right.
You can't do this though without changing not just the taxes, but the price of everything to match the lowest common denominator (that being the country that can produce product the cheapest). If Mexico can pay people $2/hr to build a car, try paying that to Americans when the cost of a house is $200k+. Even renting an apartment would be out of their financial reach. The workers won't be able to afford anything.
I don't foresee corporate globalization changing direction any time soon. You'll find that America's standard of living will drop, while other countries will see theirs rise, until some sort of equilibrium is reached.
Of course at that point you'll have One World Government, One World Currency, and the dreams of the NWO will be achieved.
18, 30.. really makes no difference. None are 'irresponsible' as it was put.
But if you want to live in a socialist world, where you are told what to buy so you can feel good, go right ahead, just don't do it around me.
---- Booth was a patriot ----
Here's one article that tries to put some numbers behind this idea (buying new efficient vs. re-using old clunker). It compares a new Prius (plus its manufacturing energy) vs. a used Corolla (no slouch in mpg). The new Prius wins out (573 million BTUs over its lifetime for gas+production of Prius vs. 701 million BTUs for gas only for Corolla).
There's other data out there support this idea. Obviously it depends on the cars under comparison, but there are some winning scenarios under cash-for-clunkers.
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.
>>>perhaps by tariffs for imported manufactured goods.
Doing that is what extended a minor market crash in 1929 into a decade-long depression. Tariffs kill trade and destroy an economy. A wiser course is for Americans to simply take a paycut. For example - a local Harley factory is leaving because they can no longer afford to pay their workers $25/hour. If the workers were willing to take a cut downto, say, $10/hour than they could keep their jobs.
But since the workers are being stubborn, they will lose their jobs as the factory moves to someplace cheap like Alabama or Arkansas, where workers are willing to take $10/hour.
It usually doesn't pay to be greedy.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
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.