Off-Topic: Cash for Clunkers Lost Money!
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Name:
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MartiniMan
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Subject:
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Cash for Clunkers Lost Money!
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Date:
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10/5/2009 3:12:03 PM
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Interesting analysis on the cash for clunkers debacle. As many critics warned, all this program did was steal car sales from before the program was instituted and from future sales after the program was halted. The program also ended up costing our economy for a very short-term boost in auto sales that were cannibalized from sales that would have occurred anyway. And at what cost once they destroyed usable vehicles in exchange for a few miles per gallon in fuel savings over a few months or a few years at most?
From the Wall Street Journal:
"Last week U.S. automakers reported that new car sales for September, the first month since the clunker program expired, sank by 25% from a year earlier. Sales at GM and Chrysler fell by 45% and 42%, respectively. Ford was down about 5%."
"Burton Abrams and George Parsons of the University of Delaware added up the total benefits from reduced gas consumption, environmental improvements and the benefit to car buyers and companies, minus the overall cost of cash for clunkers, and found a net cost of roughly $2,000 per vehicle. Rather than stimulating the economy, the program made the nation as a whole $1.4 billion poorer."
So we did nothing to improve the long-term health of U.S. automakers and we spent $1.4 billion more than we got in benefits. This is just one of dozens of reasons why government isn't the solution to our problems, government is the problem. Government at its most inept........
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