Friday, the U.S. House of Representatives rushed to restore funding to the Cash for Clunkers program. The wildly successful program has started a stampede to car dealerships where people could dump their 1984 or newer vehicle in favor a brand new more fuel efficient model.
Apparently, the program was a bit too successful as Americans drained the available funding in a mere 4 days. Hence the rush to dump more borrowed money into the program.
The whole thing seems a bit odd to us. We're in a financial crisis precipitated by excessive debt that could not be repaid. Obama and his allies in Congress - acolytes of John Maynard Keynes all - decide to dump TRILLIONS of dollars into the system in an effort to "stimulate" the economy. The idea was to make enough money available so that people would begin to spend again. The problem is all of the "stimulus" money is borrowed.
The Cash for Clunkers program gives up to $4,500 for qualifying customers (one must always say "qualifying customers" like a bad disc jockey) to apply towards the purchase of a new vehicle that meets all of the qualifications of the program and the old vehicle must be sent to the wrecking yard in the sky.
Now last time we checked, a new vehicle is considerably more expensive than $4,500. Most people - even with the $4,500 Clunker Check - will need to take out a loan in order to purchase their shiny new vehicle.
So, we're using borrowed money to encourage people to borrow money in order to get ourselves out of a crisis precipitated by the wrong people borrowing too much money. To make matters even worse, the program was so popular that it emptied the Clunker Coffer of borrowed money so quickly that we needed to borrow more money so that even more people can go out and borrow even more money.
Is it just us or does it bother you that we're using borrowed money so that people can borrow money so that we can fix a borrowing crisis? Not to mention the fact that it now quite literally takes an act of Congress to extend an automotive incentive program.
We're living in strange times indeed.
7 comments:
Stranger still, the vehicle that I traded in as a clunker, was a less polluting greener vehicle than many/most on the road.
Rather that let people with cars that really are clunkers trade their piece of crap for mine, mine will have the engine seized and then parted out or crushed.
Since there is a glut in the used car parts market, read that; mine will be crushed and some rolling smoke bomb will remain on the road. Go figure.
Thank you all for your part of the $4,500 I was given to buy my new truck!
I would like this blog so much more if it stuck to what its good at. Continue digging up dirt and muckraking in regards to the local powers-that-be. Drop the hyper-republican propaganda. We get it. You voted for McCain and it didn't pan out for you. Your clear partisanship discredits a lot of your authenticity.
The Auto industry is really hurting. If the auto industry goes belly up, then after a car breaks down there would be a more difficult time to find parts to fix the car. I'm for helping the auto industry. The stimulus solves the problem of how to get rid of those cars that tend to pollute the air with emissions and take up way too much gas to run. The stimulus helps the auto industry, the environment and helps replace cars with more fuel efficient cars. The question is when to stop giving free money to boost the economy. I would draw the line on bringing in your old computer for a rebate to purchase a brand new computer just to help the computer tech world that really doesn't need the boost anyway. The auto industry is kinda a must save.
Where are the Mayor poll results? I think you owe it to the readers to post them. Did the results piss you off?
Eye: Here is where the story on Cash for Clunkers doesn't lead. A Car Company buying clunkers in the paper and trading in car for rebate, then signing over new vehicle in another name. There are rules of who can and how many times claim the rebate, but I wonder if Car companies found a way to make a 10 to 20 on up thousand dollars! Just a wonder. No evidence or anything.
I think the Eye is correct in opining on the state of the American economy at the national level, after all, as Washington goes, so goes the rest of the countr. Cash for clunkers: what a scam, so the folks that were going to trade in their cars anyway and who can afford a high car payment, now got $4,500 for their trade-in. So much for helping the lower/middle classes! This is classic Obama-isms, telling us what to drive. I want to trade my big Dodge in on a newer, bigger Dodge...
The reason it is so popular is because they are giving $4500 no questions asked. Not too long ago I took my trade in to be evaulated.
It had 96,000 miles on it and was in good running order. I replaced the transmission at 85,000 and a whole host of other things were replaced. The dealership said they would give me $1800 but would have to take off $600 for a "reconditioning" fee. I walked out because I knew that they were going to turn around and put it back out on the lot for $6500 at minimum. So that $3000 they were willing to come down on the price of the car, they still make $2000 above the orginal price of the car they wanted to sell me. As a result of Cash for Clunkers, I was able to buy a car for my son and only put out $6000. So if the car dealers get the shaft on this one... I could care less. They have been doing us for years!
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