Will 'Cash for Clunkers' Help the Economy?

Reader Comments
Back to article

Did we really want to trade an aditional 4 miles per gallon, for around 820,000,000(thats million)lbs of scrap metal and close to an estimated 4.6 billion in consumer debt along with the 3 billion+ in tax dollars to fund the program? Not to mention the average "clunk" driver owns their automobile and pays less for their insurance and registration. Which means more money for consumer purchases. Of course, if the money is not the issue for those who have their new body transport was it really in our general interest or was it another extension of the BAIL OUT to boost sales for struggling car dealerships? Sales may be up, but its like upping the limit of a maxed out credit card with the requirement to exchange our recycled plastic for some world saving advanced composite materials that makes up that magical card we love so much. Granted the idea is right, the programs "vehicle" is all wrong! This all might make sense to some, but not to me.

Benjmin W. of UT 10:08PM August 28, 2009

I can't remember the term economists use to describe trade offs considered by decision makers when selecting among scarce resources, but I think we need to add it back to our vocabulary and thinking because words like "billions of dollars" (and soon trillions) are beginning to lose their meaning. Our debates and discussions (maybe even political decision-making) might become more meaningful if expenditures, like the $3 billion cash for clunkers program, were described in terms of how the money might have otherwise been spent. For example, how much needed health care would the clunker cash have purchased? How many health-care related jobs might it have funded? How much flu vaccine? You get the point. One thing for sure, judging the success of a program by the speed of spending under the program is beyond asinine.

Joe Ferri of CO 6:15PM August 13, 2009

The Fees of Pa wrote: "I have had enough about trickle down economics. When you supply money on the demand side of the equation, the economics roars up instead."
Trickle up or tricle down makes no difference. The money ends up in hands of big business. Why? Because they own the factors of production. They are in the business to make money. They understand that it costs money to make money. They employ people like you and I.
The fee of PA wrote: "If they took that money and gave it out to all Americans to buy more fuel efficient cars, we would be free from our dependence right now."
First off, the money, you talk about, was yours to begin with.
Be free from whom? Your dependent on the government for the hand-out. That means you are not free if you depend on someone to do something.
Free from foreign dependence on oil? This nation does not currently have the capacity and ability to provide fuel for this nation--even if every car was fuel efficient. Yet other nations don't seem to have a problem drilling in our own back yard. Democrates can't have their cake and eat it too. Do you want freedom? Then get Uncle Sam's hand out of your pocket and start drilling for your precious oil. Oh, but it cost money and you don't have the kinda of money. Exactly, that's why trickle up economics is a joke and doesn't create jobs.
You believe that trickle up makes an economy come roaring back. Seems to me, Bush was railroaded into doing just that by a bunch of Democrates. Didn't see any "roaring" economy come to life.
Lastly, you grouse about the millions spent to fight terrorism. There are many in America that believe it was wrong. They're entitled to an opinion. But at what point would you or other's have advocated war? Would it have taken another 9/11 since the first was enough reason. If not now, then when?
I, for one, am glad that my tax dollars are spent to kill terrorists in the Middle East. I'm thankful that we had a President with the cajones to take a stand and beat the living snot out of terrorist and countries that harbor terrorist. The truth be told, this fight should have happened when Clinton was in office. He had reason and motive--1993 WTC bombing, 1995 bombing in Saudia Arabia, 1996 Khobar Towers, 1998 bombing of US Embassies in Africa, 2000 bombing of the USS Cole. All told 287 dead, 8000 wounded and countless American lives forever effected. Does any of that ring a bell? Does your memory erode so quickly? What was Democrate Clinton's response . . .?

David of ID 5:55PM August 13, 2009

with mixed feelings about cash for clunkers.
Either 3000 people would need to pay $1,000,000 each in income tax, or 3,000,000 people would need to pay $1,000 each in income tax (or some combination) to make up the $3,000,000,000 authorized to be spent. Most likely it will never be made up.
Car dealers and car makers get the money. Some buyers get the discounts on new cars they might not have otherwise bought. Their discount may be similar in amount to their first year's depreciation.
The earlier crushing of maybe 750,000 big old used cars means that the prices for other used cars will go UP for people who can only afford those in the first place. Right?

Muser of NM 3:38PM August 13, 2009

Depending on what media source you look at - even two entirely different sources on the very same day - the Media is NOT helping! The "Cash for Clunkers" debate notwithstanding...look at the varous headlines today..."Feds Upbeat About Slowing Recession." On the other hand we read "Unemployment Up;" "Retail Sales Down Unexpectedly;" "Foreclosers Rising;" - does the left hand really know what the right hand is saying? And worse...do they really care? How can all be true...if the Recession is Slowing???
Report the REAL news - not what sells or draws people to your website!

udahman of WI 3:14PM August 13, 2009

I wish they would change the name of this program because this is not cash for clunkers.
I have a 1995 Saturn that is worn out; a true clunker at this point. But because the car was rated at 25mpg back in 1995 when it was new, it is not eligible for trade-in now.
At the same time someone who has a low mpg but relatively new vehicle IS eligible for trade-in.
This is not "cash for clunkers", it is "cash for cars that were gas guzzlers when they were new". Not a well thought-out plan.

bobbo of CA 3:11PM August 13, 2009

Amazing...the Administration wonders why the general populations fears/questions their every move...when they won't release data showing exactly what vehicle were actually sold. It's "reported" that 6 out of 10 vehicles were imports and of the remaining 40% some were just newer gas guzzling SUV's...what's the point??? If the government wants support then be the transparent adminsitration they indicated during the campaign they were going to be. Sh_t or get off the pot! Ypou can't have it both ways.
If you really want to reduce our dependency on fossil fuels then reduce the speed limit to 55 - thus reducing consumption which would allow for an easier, more gradual transistion away from oil supported fuels. It would easily - as it has for my vehicle - INCREASED my mileage from 34 mpg to 42.5 mpg(20% increase in meileage equates to a 20% REDUCTION in consumption) - but the problem is you take your life in your hands by driving 55 from the fools who can't see the forest from the trees

udaman of WI 3:07PM August 13, 2009

...and my March 1984 Chevy was refused because the cut off for 1984 is the day you pay for the new car....what a bureauCRAP.....1984 should be 1984!
So I'll just go merrily down the road in a cloud of burning oil and using ya'lls gas at twice the normal rate.
Thanks Obama

Bob Anderson of NY 2:52PM August 13, 2009

Cut middle class taxes so we have some hope of having some spending money in the future. For now, I've got to plan on having less disposible income each year for the foreseeable future.
And my 401k -- what a cruel joke.
We put money in there to defer taxes and now we'll be paying MORE TAXES on it in the future.
Anyone that's still putting money into a 401k needs to wake up and see what a disaster this is going to be.
Put your money into ANYTHING ELSE -- pay your taxes now -- while there are still affordable!

njguardian of NJ 2:05PM August 13, 2009

How is this program supposed to benefit America exactly?
The benefit is touted as a program that removes carbon producing cars from the freeway and stimulates the economy by keeping assembly lines moving and thereby keeping lazy, high school drop-outs from losing an assembly line job where they can maintain their artificial, high salary. At least that's the whitewash job that's been glossed on with a broad brush.
Scratch the gloss and you'll see the pitted tarnish underneath.
American automakers are suffering, going into bankruptcy, getting bailouts, etc and Congress turns around and allows foreign automakers to cash in on this program? The enemy is the competition. Congress, is aiding and abetting the enemy by subidizing foreign automakers. That makes complete sense!?
America and Americans are in a recession because we over extended ourselves. But instead of ratcheting in our belts a few notches. Congress wants people to stay enslaved. Why else would Congres want to entice people to trade in the freedom of no car payment for the yoke of an over priced, new car and slavery to a car payment?
American's are in a recession because of borrower defaults, excessive credit purchases, essential commodity price increases, living on savings to meet day-to-day living expenses, and excessive worry.
Understand the reason people drove clunkers in the first place. They drove them because they couldn't afford anything better. "Cash for clunkers" entices these consumers to borrow and take on more credit debt causing consumers to rely more heavily on savings for essential needs because they really can't afford a $300 car payment for the next 60 months. Now things are relatively more costly. Now families have an unexpected car payment each month and making essential purchases feel more costly and acutely more painful.
I'm sure Obama's words to Joe the Plummer of spreading the wealth around are soothing lullabies to depressed America much like opium numbs the addict.
That is until the logic in our collective brain screams through the stupor induced fog that the wealth Obama wantes to "spread around" is middle class wealth to the the unionized dullards in Detroit; at which point, the nightmare begins.
Now "cash for clunker" consumers lie awake at night with buyer remorse/dissonace wondering what in the h*ll they were thinking. Praying beyond hope that Obama's change isn't again reflected in a pink slip when they show up for work tomorrow ...that is, if they even have a job.

David of ID 1:23PM August 13, 2009