The House of Representatives has passed Rep Betty Sutton’s $4 billion scrappage scheme [download full text here], reports CNN Money. The bill now goes to the Senate. Under Sutton’s bill, clunkers with a combined 18 miles per gallon rating or worse would be eligible for a scrappage rebate. Purchasing new vehicle which exceeds its replacement’s rating by four miles per gallon would earn a $3,500 rebate. Improve the combined EPA average by 10 mpg and snag $4,500. Offer good for one year. Or until we tear through $4 billion in a wholesome, American display of redemptive consumption. I’m sorry, I mean “shore up millions of jobs and stimulate local economies . . . improve our environment and reduce our dependence on foreign oil. The [Consumer Assistance to Recycle and Save] act demonstrates that we can free ourselves from the false argument of either you are for the environment or you are for jobs. You can do both, you must do both.” As the bill’s author modestly puts it.
Bummer. I get 22mpg on my clunker and might be interested in a Honda Fit if I were to qualify. Oh well, I’ll just keep it another 5 years and not help stimulate the economy…
If it was truly about the environment, then they’d give rebates for frugal used cars, too.
Funny, the MSRP requirement of under $35k in 2.11 seems to exempt the mythical Volt from this rebate scheme. But the plug-in electric provision of Section 6 seems to be especially written for it. Incidentally, I guess we now know what the EPA fuel economy will be for the Volt – 100 MPG. Last I saw, Chevy and the EPA were still arguing over how to calculate it. Looks like Congress has already settled it long before the car reaches production.
And we can’t be giving rebates to “rich” people who might consider the all-electric Tesla.
The “assembled in the United States” or “assembled in North America” requirement may simply send consumers to the transplants and accelerate the certain demise of GM – sorry UAW. So much for saving jobs.
As expected, buyers of gas guzzlers are rewarded. Cars with poor resale values are rewarded.
The [Consumer Assistance To Recycle and Save] act demonstrates that we can free ourselves from the false argument of either you are for the environment or you are for jobs. You can do both, you must do both.” As the bill’s author modestly puts it.
————————————-
Only it’s a lie.
This is not for the environment.
This is not for jobs.
This is for UAW jobs.
Wanna go for the environment? Add a $1/gallon gas tax and let consumers decide for themselves whether it’s worth it to change a car.
Oh, don’t forget to reduce payroll tax with the added revenue.
Looks like the car has to have been insured for the past year to be eligible. I wonder does that mean by the last owner or can people go to craigslist to get a clunker for a couple hundred bucks that is in running condition?
Same here… wondering about that too.
Also I’m wondering if there is an age limitation for the vehicle.
Ouch. I didn’t see that part about having to be insured for a year. And nothing older than 25 years. Maybe if this increases the sales of fuel efficient cars, sales of cars with powerful engines will fall, causing the manufacturers to put rebates on those vehicles. Then the TTAC crowd can benefit anyway. I’m also betting that rebates will dry up for efficient models, and dealers will quit selling them for invoice, so it may not be as good of a deal.
How old does the vehicle have to be? Is there a cut off with the actual aqe of the vehicle?
That will add 1 million cars to the yearly production total. That’s a sizable boost in a downturn – equivalent to over 10% of new vehicle sales.
I don’t think there’s a minimum age, they just figure that resale value will keep the new stuff from being scraped.
If they have to piss away money in the name of saving the economy, I wish they’d make the vouchers available to anybody, not just people who have chosen to drive an old POS.
Chevy Astro owners rejoice!
@ Steven Lang:
The article says that to be eligible the vehicle can’t be more than 25 years old. Nothing about a minimum age.
This is just another example of the legislative branch intervening to reward the most irresponsible members of our society.
What’s in it for those of us that (responsibly) choose to drive cars that get decent gas mileage and are ready and able to purchase new cars to replace them? Definitely not a $3,500 check.
If you were responsible and didn’t foolishly buy into an overinflated house, no dice for you! If you were an idiot and bought too much house: don’t worry, we’ve got programs to help you. same for cars same for the dumb-ass banks and corporations that got us here!
How old does the vehicle have to be? Is there a cut off with the actual aqe of the vehicle?
The CNN article says the car cannot be any older than 25 years.
“This is just another example of the legislative branch intervening to reward the most irresponsible members of our society.”
Well, the many poor people leasing Mercs and Bimmers are out of luck on this one, and I wouldn’t necessarily call driving an old car to be irresponsible. It only rewards the people who have not been doing what the government wants, which is to buy new fuel efficient vehicles. A solid f- you to those of us who bought a new vehicle in the past few years. I consider this more of an example of big government being allowed to throw around too much money. They aren’t particularly fair.
Normally I’m content just to read the articles and comments but today I’m compelled to post one of my own. I currently drive a 1971 IHC pickup truck with a 392 IHC V8 and automatic transmission. It gets awful gas mileage, even going downhill! It IS a clunker! It has no paint left on it. It even has a few dents. But it runs good and gets me where I need to go when I need to go. If the great white fathers and mothers in Washington DC think they can get me to part with this jewel for any amount of money, they’ve got another thing coming. But what they can do is send me a brand new Chevy Silverado as repayment for my contribution to these never-ending bail outs.
This is just another example of the legislative branch intervening to reward the most irresponsible members of our society.
Right, and we shouldn’t pay obese people insurance credits to go to the gym, either.
People get far too caught up into the perceived “unfairness” and don’t think fully about why something is being done. It’s not to reward bad choices (if you can even call it that – how do you know why someone bought the vehicle they have?), it’s to stimulate the economy, and particularly the industrial economy, during a severe recession AND to improve air quality AND to improve the US fleet average fuel economy, which lowers demand for fuel and lowers gas prices for everyone.
Is this particular bill a good one? That’s debatable. But the concept itself, as a whole, has merits. I’d like to change some things of it to benefit myself personally, too, but then again, this is a nation that had (still has?) a $25,000 tax deduction for things like Hummers and Excursions, which for some reason also don’t have to abide by CAFE standards because they’re just so darn huge. So I don’t harbor illusions that the world is fair to me personally.
It’s kind of funny seeing so many people up in arms about unequal benefits and perceived unfairness of specific government policies. Welcome to the world as it is and always has been.
If it passes the senate, the fraud and scams will be monumental, starting with a voucher black market.
paradigm_shift : Bummer. I get 22mpg on my clunker and might be interested in a Honda Fit if I were to qualify. Oh well, I’ll just keep it another 5 years and not help stimulate the economy…
Oh but you will: mechanics, part suppliers, and Piston Slappers need your old ride just as much as you do.
(i.e. Cash For Clunkers be damned, keep those Piston Slap emails coming!)
Wouldn’t it be a wonderful thing if at least two existing federal laws had to be repealed for every new bill that was introduced?
Edit: I’m not sure that the link to the Thomas site (or govtrack.us) is what was passed in the House today. The text doesn’t seem to reflect the compromise that was reported in early May. So I suppose we can depend on CNN to report it the way it is. (Right…)
Original comment:
I don’t think that the bill passed by the House is what CNN reported on, at least not entirely. Maybe I’m missing something, but I see no reference to having to have insured a car for a year before getting a voucher. It says:
(A) is in drivable condition; and
(B) has been continuously registered and
licensed to operate on public roads in any State
for a period of not fewer than 120 consecutive
days immediately prior to such presentation
Sounds like Craig’s List might be a good place to go, if the Senate concurs with this language. If you want a US made vehicle, that is:
A voucher issued under the Program may be applied to offset a portion of the purchase price of one new fuel efficient automobile meeting the criteria set forth in this paragraph, which portion shall be the amount of
(A) $4,000 for a
(i) passenger automobile assembled in the United States with a minimum highway label fuel economy value of 27 miles per gallon;
(ii) passenger automobile assembled in North America with a minimum highway label fuel economy value of 30 miles per gallon; or
(iii) nonpassenger automobile assembled in the United States with a minimum highway label fuel economy value of 24 miles per gallon;
(B) $5,000 for a
(i) passenger automobile assembled in the United States with a minimum highway label fuel economy value of 30 miles per gallon; or
(ii) work truck assembled in the United States registered by the dealer as a registered work truck; or
(C) $3,000 for a nonpassenger automobile assembled in North America with a minimum highway value of 24 miles per gallon.
I highly doubt that the Senate will go along with the “Made in USA” language. Seems like it would be just asking for a WTO protest from the Germans, Japanese, or Koreans.
…work truck assembled in the United States registered by the dealer as a registered work truck…
Potentially huge loophole: I see plenty of mommy mobile Tahoes, Navigators, etc with work truck (called “Texas Truck” plates in TX) identification.
Maybe dealers will need to show proof of a corporate owner, but plenty of people with their own businesses can exploit this for their personal vehicle if the wording isn’t more explicit. And I seriously doubt they’ll say something like “for base model pick up trucks only, no King Ranch Lariats or SUVs with leather and navigation.”
“(B) has been continuously registered and
licensed to operate on public roads in any State
for a period of not fewer than 120 consecutive
days immediately prior to such presentation”
I wonder, does buying a clunker for cheap from someone interupt the continuity of being registered and licensed, is that their intent with that language? Or just to keep the rust heaps in someone’s back yard from being turned in for $3,500-$4,500? Sounds like a 1986 full size van may be the ticket.
Edit: I’m not sure that the link to the Thomas site (or govtrack.us) is what was passed in the House today. The text doesn’t seem to reflect the compromise that was reported in early May. So I suppose we can depend on CNN to report it the way it is. (Right…)
Original comment:
I don’t think that the bill passed by the House is what CNN reported on, at least not entirely
The link at the top of this post goes to HR1550. The one that passed today is HR2751. Same sponsor, different bill. What the differences are I’m not sure, but here’s the text of the bill as passed 298-119.
http://thomas.loc.gov/cgi-bin/query/z?c111:H.R.2751:
The text of the bill indicates 1 year of continuous use/registration prior to getting the voucher, being MY1984 or later, being in drivable condition (oh, that will be fun to interpret and enforce), and get 18 mpg combined or less.
“(7) the term ‘eligible trade-in vehicle’ means an automobile or a work truck (as such terms are defined in section 32901(a) of title 49, United States Code) that, at the time it is presented for trade-in under this Act–
(A) is in drivable condition;
(B) has been continuously insured consistent with the applicable State law and registered to the same owner for a period of not less than 1 year immediately prior to such trade-in;
(C) was manufactured in model year 1984 or later; and
(D) in the case of an automobile, has a combined fuel economy value of 18 miles per gallon or less;”
And you can forget about this thing being used to buy fuel misers. Look at this crap:
“(B) the new fuel efficient automobile is a category 1 truck and the combined fuel economy value of such truck is at least 2 miles per gallon higher than the combined fuel economy value of the eligible trade-in vehicle;
(C) the new fuel efficient automobile is a category 2 truck that has a combined fuel economy value of at least 15 miles per gallon and–
(i) the eligible trade-in vehicle is a category 2 truck and the combined fuel economy value of the new fuel efficient automobile is at least 1 mile per gallon higher than the combined fuel economy value of the eligible trade-in vehicle; or
(ii) the eligible trade-in vehicle is a category 3 truck of model year 2001 or earlier; or
(D) the new fuel efficient automobile is a category 3 truck and the eligible trade-in vehicle is a category 3 truck of model year of 2001 or earlier and is of similar size or larger than the new fuel efficient automobile as determined in a manner prescribed by the Secretary.”
And by the way, the Fiat deal is going through. The Supreme Court decided to let it fly. Stay tuned for more Government Gone Wild.
Yippee! Free money from the gummint!
Now, a splash of cold water:
“The legislation now goes to the Senate.” Don’t expect the Senate to rubber-stamp the House bill.
“The House bill would go into effect within 30 days of enactment but it is not retroactive” Just buy a car? Sucker!! And in my experience, getting a big program in operation in 30 days would be a miracle. Meanwhile, it’ll be prudent to wait for enactment.
“The program lasts either one year or until the funding runs out.” So hurry and grab your voucher! And what happens when the money’s gone? Sales will plummet. So Congress will have to hand out the freebies again.
And as moawdtsi asks, what is “continuously” registered–by anyone? What exactly is a “work truck”? And where in America does the dealer instead of the buyer register a vehicle? Some agency will have to write regulations to answer such questions. That doesn’t happen overnight. Not that politicians bother to consider such details. The better you know ’em, the less you respect them.
Demetri — thanks for the research.
“Stay tuned for more Government Gone Wild.”
Perfect!
And you can forget about this thing being used to buy fuel misers. Look at this crap:
Forget about the class 2 and class 3 trucks for a moment, and assume that an equal number of truck/suv and car owners trade in their vehicles to the bare minimum threshold. If the average miles driven is 10K miles per year, the fuel savings in that year is about 85 million gallons, split about 3:5 trucks to cars.
Over an average vehicle lifespan, and at current gas prices, the value of the gas savings is $4.6 billion, or more than the cost of the program itself.
Granted, the people participating in the program are getting all that money directly, but that is $4.6 billion that would otherwise go 2/3 to foreign oil producing nations.
Yippee! Free money from the gummint!
Would you rather the handout of that magnitude go to Exxon like it normally does?
long126mike is right… link amended.
“Forget about the class 2 and class 3 trucks for a moment, and assume that an equal number of truck/suv and car owners trade in their vehicles to the bare minimum threshold. If the average miles driven is 10K miles per year, the fuel savings in that year is about 85 million gallons, split about 3:5 trucks to cars.”
What happens to the cars and trucks that get “turned in”?
Are they to be dumped in a junkyard somewhere? That’s wasteful – those cars still had some useful life in them, and their presence in a junkyard constitutes pollution.
Are they going to be recycled? If so, the amount of energy used in the process of recycling those cars will likely exceed the amount of energy saved in gas from the new cars purchased.
More misleading pro-UAW nonsense from the only presidential administration to out-bullshit the Bush administration.
I wonder why they limited the traded in vehicle to model years 1984 and newer. Why not scrap a 1983 beater?
Now I’m kicking myself a little for all the work I’ve done to keep my ’89 F150 in excellent mechanical condition. The paint and body are pretty sad from twenty years of California sun, and $4500 would make a big dent in a new work truck, but it seems a damn shame to grind up a vehicle which still works very well, has new brakes all around, new Michelin tires all around, new ball joints, tie rods, oil pan gasket and so on. But, I would be hard pressed to get more than $2k for it as a used vehicle. $4500 is more than it is ever going to be worth. Had I not done all of those repairs over this past year it would be easier to consider scrapping it. Weird times.
@Edward
The Thomas query routine has always been a little goofy. The link ends up going to a blank page sometimes.
The PDF version of it is here:
http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h2751ih.txt.pdf
Feel free to delete this comment.
Just FYI.
Can I trade in a 1989 chevy blazer for $4500 towards a $10k electric motorcycle?
If other countries with similar (but much less complicated ..) scrapping schemes are an indicator, this bill or these bills will impact new car sales even more while people are waiting for how this shakes out. Yes, the made at home clause should invite WTO action. However, after cursory reading, I could not find such clause in the bill.
Whatever the rules, you can bet that it will be a big waste of money, like any government program to interfere in the “free market”. Which reminds me- the only free markets in the land of the formerly free- are gun shows, yard sales, and illegal drugs, all of which have NO government involvement.
One thing which doesn’t seem clear is what happens if a person trades in an old truck or SUV and gets are car. There seem to be two separate sets of rules for cars and trucks. I might not fully understand what is proposed here though.
i may not be reading it correctly, but the language seems to say that the fuel economy bump is determined by what new vehicle is being purchased.
For the $3,500 voucher, if the new vehicle is a passenger car, the bump needs to be at least 4 mpg. So the old vehicle could be a car or a truck, as long as the new passenger exceeds is fuel economy by at least 4 mpg AND gets 22 mpg minimum combined fuel economy. For a new light truck, the bump needs to be at least 2 mpg and 18 mpg minimum. For a category 2 truck it’s 1 mpg and 15 mpg minimum. For a category 3 truck, the trade-in vehicle must be MY2001 or before. There’s also a limit on the number of category 3 trucks to 7.5% of all vouchers.
To get the $4,500 voucher, the fuel economy bumps are much larger.
There’s also provisions on one voucher per person, a limit on the MSRP of the new vehicle of $45K, etc.
I believe the current Senate version as proposed by Feinstein might also let vouchers be used for transit passes.
It’ll be interesting to see if this actually makes into law, and if it does, what final form it takes.
Whatever the rules, you can bet that it will be a big waste of money, like any government program to interfere in the “free market”.
Yeah, man – government teh sux. Anarchy rulez.
Damn nothing older than 1984! Know an older gentleman with a 71 Chevy pickup he was going to scrap to buy his wife a Equinox or Torrent. He actually drives the old Chevy but he replaced it about 3 months ago with a new GMC Canyon. He just didn’t part with the truck when he bought his GMC.
(And yes for those of you who are interested, it’s a rusty old mess that’s on it’s second engine and transmission.)
Which reminds me- the only free markets in the land of the formerly free- are gun shows, yard sales, and illegal drugs, all of which have NO government involvement.
Speaking of anarchy and illegal drugs, outside of some external enforcement, it’s correct that the illicit drug trade is one of the prime examples of what happens in a real free market.
I’m not sure which part of that hierarchy of scum, the violence or villainy, appeals to the libertarian.
Damn nothing older than 1984!
Probably to keep collectors from cashing in their unfinished projects.
This sounds like it’s going to be a truck-only party. Correct me if I’m wrong, but even in the mid-late 80s, it was uncommon for a passenger car to average 18mpg or less. Your trade in needs to be 18 or less to get the voucher. Sounds like the only eligible trade ins will be trucks, and I doubt they’ll be trading them in for sub-compacts. The new truck only has to get 2mpg better. 1mpg better if it’s a cat2. None if it’s cat3. I guess this is their way of cutting down the excess truck inventory.
The only window of opportunity that I see is that it doesn’t go into affect until a month after it’s passed. So if you buy, register, and insure an old truck as soon as it passes, you will be able to get a voucher in the last month of the program, assuming that they don’t run out of funds.
This sounds like it’s going to be a truck-only party. Correct me if I’m wrong, but even in the mid-late 80s, it was uncommon for a passenger car to average 18mpg or less.
You’re generally right. The passenger cars are things like Crown Vic wagon, Volvo wagons, Delta 88, Grand Prix, Bonneville, Camaro/Firebird, all the big luxoboats, etc. A lot of those things are still riding around in less well-to-do locales.
Is it just me, or does the government want us to spend even more money?
A 4.5k voucher on a new car is still a big purchase. At least a few thousand morons will see this as a huge deal on a new car that they can’t really afford, and go bankrupt and stuff. >:O
Spend spend spend spend!
@John Horner:
You might do better to hit “Buy it now” on this eBay auction, which the seller very badly screwed up and — as of the moment I write this — has not fixed: it is for a cancelled fleet order of twenty-five well-equipped heavy-duty Sterling Bullet (i.e., Dodge Ram 4500) Cummins Turbodiesels. The auction, as written and placed, is for the whole, entire lot of trucks for one money, making the per-truck price exactly $1,160. Perhaps the seller intended to use eBay’s multiple-quantity-available provisions to sell off each truck at $29K, but that’s not what he did. Whoever hits B-I-N on this auction is going to cause some very interesting news stories, and will very likely have the law on his side. An auction, as eBay incessantly reminds us, is a legally binding contract.
Spend spend spend spend!
There’s a reason why america is such a powerhouse: aggregate growth.
As long it’s not insanely overpriced, and there’s no free credit now, it should be ok.
Spend spend spend spend!
2/3 of GDP. That’s America.
Its Socialism in Capitalist clothing. Not that I’m against helping one another by any means needed. Still this is what the oligarchy calls caring. Interesting stuff, how do they do it? I’d probably not vote for a gas tax or pay as you go deal, anytime soon. Its against my principles, I’d buy a Honda first, then let the U.S. turn into Haiti. This country seem more clearly transparent in its intentions to baby sit one another. Its no longer just parent the world, I mean its now more parenting of one another. Either way I’m probably gonna need to adapt and accept some crazy new ignorant, stupid, oppressive, vindictive and sad dejection. I’m gonna to rewire my attitude and behavior towards myself (in a more compassionate way) and others, again, still. Everything is fine, I’ll be fine, even If I feel a big angry, scared, sad, hurt, and ashamed sometimes. No one to blame, humans are not perfect.
My 525i qualifies, but I’m better of keeping it. Good braking, reliability, comfort, power, handling etc etc.
Name me ONE government program that isn’t a waste of money. The Social “security” trust fund has been EMPTY since day one. If they had been prudent, and “saved” it or invested it since 1935, it would now have more $$ than they would know what to do with in there. Government policies caused the 1st depression, and the COMING one too. Long126march- hope you have some food and precious metals stashed away before you laugh too hard.
Hippo :
June 9th, 2009 at 8:28 pm
If it passes the senate, the fraud and scams will be monumental, starting with a voucher black market.
Who cares ? Monumental fraud and scams ? Your joking, right ?
I bought my guzzler/clunker last month. (96 Ford Bronco(
Where’s the Steve Lang post on the Depreciation Fairy vs. C4C ?
How interesting that people say we’re going to turn into Zimbabwe or Haiti. I can’t imagine what they’re trying to communicate with that.
And here I thought liberals were sore losers in 2000. That was nothing.
If they had been prudent, and “saved” it or invested it since 1935, it would now have more $ than they would know what to do with in there.
Absolutely. Put it in the safe and sound stock market. No, even safer – real estate.
Name me ONE government program that isn’t a waste of money.
I agree that some education spending has obviously gone to waste.
The AP also has a story on this:
http://news.yahoo.com/s/ap/20090610/ap_on_go_co/us_cash_for_clunkers_8
The vast majority of vehicles which would qualify for crushing are trucks and SUVs given the 18 mpg threshold. The crazy thing is, if you trade your old Explorer in on a car, the car needs to get 10 mpg more than the Explorer did to get the maximum voucher. But, if you trade in on another new truck or SUV, the new vehicle only needs to get 5 mpg better than the old vehicle to qualify for the full $4500. So, they would incentivize people to get a new truck or SUV instead of a car.
Ahhh, that is how they are pushing a Buy ‘merican angle!
We shall see what any final legislation ends up looking like. Now that the congress has wadded into this mess they had better make up their minds quickly, because the already shrunken new car market is going to freeze up even more as people wait for these newest handouts. Maybe they should just get Bertel to translate Germany’s clunker law into English and hit it with a rubber stamp!
As a matter of fact, I think that Obama is doing as good a job as we can expect, given the horrible situation(s) that he inherited. But those financial problems will not be solved by MORE excessive spending. Actually, the similarities to GM are quite strong. Instead of cutting programs and product like Lido Iacocca did, GM went the opposite direction. Instead of cutting spending drastically, GW Bush AND Obama increased spending recklessly. The crash is coming. You can quote me.
P.S.- Both sides are to blame, and spewing insults does nothing for your case.
This country seem more clearly transparent in its intentions to baby sit one another. Its not longer just parent the world, I mean its now more parenting of one another. Either way I’m probably gonna need to adapt and accept some crazy new ignorant, stupid, oppressive, vindictive and sad dejection. I’m gonna to rewire my attitude and behavior towards myself (in a more compassionate way) and others, again, still. Everything is fine, I’ll be fine, even If I feel a big angry, scared, sad, hurt, and ashamed sometimes. No one to blame, humans are not perfect.
Interesting, I didn’t know the feds voluntarily buying up some clunkers has this kind of effect on people.
But, if you trade in on another new truck or SUV, the new vehicle only needs to get 5 mpg better than the old vehicle to qualify for the full $4500. So, they would incentivize people to get a new truck or SUV instead of a car.
Since there’s only one pickup that gets 23 mpg (the Ranger and its Mazda clone), that’s a pretty limited selection for trucks. As for SUVs, the only non-hybrids that get those kinds of numbers are the little utes like the Compass, HHR, RAV4, etc.
I don’t think the incentives go that way at all. There’s a decent selection of 28 mpg+ passenger cars, and all things equal, they’ll be cheaper than the light trucks. Nice thing is that the bill lets people decide for themselves what’s going to work, and regardless of what they choose, it will still be a good bump in fuel economy (and emissions) compared to what they’re scrapping. Anything that’s worth less than $4,500 is pretty crappy, generally, and you have to imagine that the majority of the scrapped vehicles are going to be the ones with the lowest values – the oldest, thirstiest, and dirtiest vehicles.
Interesting, I didn’t know the feds voluntarily buying up some clunkers has this kind of effect on people.
A special Congressional appropriation of $16.95 was authorized for a birthday cake for a 64 year old civil servant named Phil who has worked in the ballistics lab of the FBI for 40 years.
Upon hearing of this, I immediately began to stockpile provisions for the coming meltdown of human society across the globe.
It shocks me that the scales have yet to fall from your eyes about the ruinous path this birthday cake appropriation exemplifies.
The crash is coming. You can quote me.
Oh, I will. The global press will be calling you when it all falls to pieces into irreparable chaos. I’ll make sure they knew who called it. The End Is Nigh. I shall repent.
Will there be good cell reception in your bunker? Or will looters have smashed all the telecommunications infrastructure at that point?
P.S.- Both sides are to blame, and spewing insults does nothing for your case.
What “insults” were “spewed”? Perhaps you could point those out.
But those financial problems will not be solved by MORE excessive spending.
Actually, they’re exactly solved by this kind of spending.
The idea is not that complex when simplified:
1. The econ needs a certain volume of activity to sustain itself effectively
2. During bad times, stimulus is needed to maintain this volume
3. This stimulus can come in monetary form (ie fed reserve lowering rates), or failing that because rates are essentially 0, fiscal spending (like this clunker program).
—
Not recognizing these principles is incidentally how we plunged into the first depression. FDR’s spending helped, but it wasn’t until the MASSIVE spending spree of WW2, greatly more wasteful than this by far, that we ultimately lifted back into the prime.
It also helped that the destruction of war significantly set back our international competition.
Love, I want a loving society, and not just a car loving society. Not a doormat society, not an I need to control you for your own good, you can’t make good decisions on your own society. I’m entitled to better, constitution, army, laws, religion, contributions or not. I don’t want a controlling, manipulative, dishonest, oppressive place to live. Many people in power, including voters can’t hear me. This is my life. I’m happy, I’ll be happy either way I think, but I prefer a loving nation.
What is love, that is the question. Looking at my love of cars has given me lots of answers to what is. Its not hating it and trying to rotate the universe so my car gets 10mpg, its using my resources to do what is best for me. That includes not forcing others to fix my problems if they don’t want to. It includes accepting that BMW has more then just my feelings for making its cars. I can go up to BMW and tell them they are horrible people and I’m not letting them do what they want, but it won’t make my actions any less hurtful to tell them why I think they are horrible and wrong.imo. I can’t tell another what is right for them. I’ll take responsibility for my actions against them without doing that though. I’m willing to pay the price. Is this society doing the same?
@ agenthex
But… supply and demand! No new taxes! Free market! Econ 101! Mises!
Great work, as always. +1
“P.S.- Both sides are to blame, and spewing insults does nothing for your case.
What “insults” were “spewed”? Perhaps you could point those out.”-L126M
I could point them out to you, but you would ignore them.
I was sincere when I said that I hoped that you (and everyone) has some food/precious metals stashed away. When (or IF, as you insist) TSHTF, your government won’t be able to help you.
I could point them out to you, but you would ignore them.
Oh, so you have proof, you just won’t make the “effort” to show that proof. Plus, as an added bonus, you choose to do some insulting yourself, by presuming me to be the kind of person who would ignore evidence that I requested. Ironic, to say the least.
I would love to see where I “sent or cast forth with vigor or violence or in great quantity” “acts that offend against a person’s dignity or self-respect.” Because looking at the limited words I used, I see them agreeing with you, albeit in a tongue-in-cheek manner appropriate to the tone and attitude of your comment that preceded it.
I was sincere when I said that I hoped that you (and everyone) has some food/precious metals stashed away. When (or IF, as you insist) TSHTF, your government won’t be able to help you.
The Mormon guys in my neighborhood give me that same line. Joseph Smith started using that line back in the 1830s. The apocalypse is always just around the corner.
Speaking of anarchy and illegal drugs, outside of some external enforcement, it’s correct that the illicit drug trade is one of the prime examples of what happens in a real free market.
I’m not sure which part of that hierarchy of scum, the violence or villainy, appeals to the libertarian.
The “scum”, “violence”, and “villainy” are the direct result of it being an ILLEGAL market, it has nothing to do with free market principals and I have no idea how you equate the two.
I don’t recall ever hearing of gang violence breaking out at a flea market, but if you suddenly outlawed them and threatened people with 20 to life for participating, I guarantee you would a) artificially drive up prices and make selling a highly lucrative and attractive position for those who don’t mind the risk (i.e. the poor and sociopaths), b) knowing the risks, people would NOT play nicely.
There are worse ways to burn $4b with ZERO return. Just look at Chrysler, or GM, or Citi bonuses, or Iraq….
At least the average fleet fuel efficiency of the US Banana Republic might finally head upward after a peak in 1987!
@redrum
So, to summarize, in the absence of laws and regulations, people self-regulate. With laws and regulations, people turn into murderous thugs.
You should come to my neighborhood some time and we’ll do a tour of that theory as it’s tested in reality.
The “scum”, “violence”, and “villainy” are the direct result of it being an ILLEGAL market, it has nothing to do with free market principals and I have no idea how you equate the two.
I don’t recall ever hearing of gang violence breaking out at a flea market,
That’s because the socialized cops would be all over their ass.
Hell, the Fascist pigs won’t even let you sell drugs there.
Anyway, how did your libertarian nirvana come to have so many laws passed and a central government strong enough to enforce them?
So, it’s exchange clunkers for more clunkers?
And I can’t swap my old Camry (made in Indiana) for a 50 MPG Prius?
I call upon senators Feinstein and Boxer to filibuster this legislation!
@ PeteMoran
At least the average fleet fuel efficiency of the US Banana Republic might finally head upward after a peak in 1987!
UCS is great, but I think they’re being unclear there about what’s going on.
They’re referring to the combined fleet CAFE estimates for a given year’s actually sold vehicles. There was indeed a peak in 1987 at 26.2 mpg, but this was finally exceeded in 2007 at 26.4 mpg. I don’t have last year’s data handy, but I’m confident it’s at least that high.
Problem with CAFE estimates is that it only describes the CAFE ratings for the average of all vehicles sold in a given year. The vehicle mix changes year-to-year as the result of many factors, and the CAFE numbers really aren’t reflective of actual fuel economy numbers, because there is a massive ethanol loophole (which GM in particular likes to exploit), because those numbers are very inflated relative to actual real-world fuel economy performance, and because a number of vehicles are exempt from CAFE standards (like vehicles with GVWRs above 8,500 lbs – which is thankfully going to change eventually, along with the ethanol loophole).
What you want to look at are the actual total fleet MPG averages, not just the CAFE ratings for new vehicles sold that year.
http://www.bts.gov/publications/national_transportation_statistics/html/table_04_09.html
Total fleet average MPG in 1987 was around 15.5 mpg, as compared to the new fleet CAFE number of 26.2 mpg. These real-world numbers started to stall in the early 90s, but in the past 5 years or so have begun climbing again. The number for 2007 was about 2 mpg higher than the 1987 number. Pathetic, yes, but still higher.
Those numbers will start shooting up soon as the new CAFE legislation phases in, and hopefully someone in government will grow a pair and start putting floor prices on retail gasoline and capping total consumption and gradually lowering it.
To supplement the informative post above, basically what happened is that fuel efficiency for new cars has stagnated around 26mpg for couple decades. However since older clunkers were being phased out during this time, the overall average for all cars has finally reached this plateau of ~26 once rid of the abysmal hogs.
This would support the hypothesis that CAFE is indeed effective in placing a floor on efficiency, and also supports the accelerated obsolescence offered by this clunker program.
So my ’84 Volvo 245 Diesel is ineligible for TWO reasons:
[a] It gets a combined 35mpg per the EPA, so it isn’t under 18mpg.
[b] Nothing you can buy today gets 10 mpg OVER 35mpg combined.
My ’96 Miata is right out as well.
I lose.
@ long126mike
I have the research paper that the UCS summary is based on and while it seems a little unclear, I believe they’re talking about real world usage data. “This decline is attributable to the relative stagnation in CAFE standards prior to the passing of the 2007 energy bill, the doubling of annual vehicle miles traveled in the last 25 years and the increase in SUV and light truck sales.”
Anyways, I accept your commentary.
The money pumped into fuelling inefficient cars over the years rather than other productive purposes (economic expansion, innovative new industry etc etc), from an economic productivity point-of-view, is staggering.
It’s one of the effects being observed in an energy efficiency economy like Germany. Productivity is UP, and the $$$ used as inputs in energy purchasing as %% of GDP is falling. Solar (for Germany) is a big part of that change, so is fuel efficiency for Europe in general.
Eco-weenies aren’t always wrong…..
@ agenthex
Exactly.
I always enjoy the standard mythology that gets recited about “Carter bad/Reagan god” as it relates to the economy, Iran, and energy prices.
Carter inherited the remnants of the 1st oil shock, plus he inherited Nixon’s convoluted price controls of domestic gas and petroleum. He also inherited the CAFE standards legislation passed and signed by Ford in 1975, and implemented starting in 1978. Carter worked to push the standards much higher, but he also got nailed by the second oil shock in 1979. Concurrently, he made a deal to phase out price controls on domestic energy in exchange for having a windfall profits tax on the revenue above the original regulated price levels.
Unfortunately for him, this resulted in big price run-ups in gasoline, which set off the whole inflation problem and necessitated interest rate increases to try and put a lid on the inflation.
Reagan got to waltz in after this mess, take credit for eliminating price controls of energy (even though Carter set it in motion), and he also promptly put the brakes on the CAFE trajectory going mid 1980s forward.
Lucky for him CAFE worked so well in moderating consumption, that coupled with the recession, it kneecapped OPEC in the mid 1980s and the US (and the world) got 20 years of very cheap oil to fuel the economic booms they enjoyed. He even took credit for discontinuing the windfall profits tax late in his 2nd term, even though no tax was being generated because global oil prices had fallen below the former regulated price level. It was actually eliminated because it wasn’t necessary any more – it had done its job.
Reagan also jacked the federal gasoline tax for the first time since the late 1950s – more than doubling it – yet the mythology is that he was some tax-slashing deity. This is particularly ironic coming from anti-gas-tax motorheads.
The price deflation of oil of course led to the gutting of the domestic oil industry for many years and the rapid increase in dependence on foreign oil.
And like any good Republican figurehead, HIS trajectory with energy left a big time bomb for future leaders to deal with.
What’s also interesting and rarely noted is that Clinton tried to boost the gas tax by about 50 cents early in his 1st term, with a good portion of it going to pay down the Reagan/Bush debt, and he ended up getting raked over the coals for it and especially crushed by some key Democrats in Congress, leaving him with a mere 4.3 pennies of out that half dollar proposal. What’s also interesting is that a good portion of that was dedicated to deficit reduction and worked very well in that capacity, such that by the 1994 elections, the deficit had shrunk considerably from what he had inherited.
Naturally, Newt and Gang exploited this with the “tax and spend” label and were able to swoop into power and take credit for deficit reduction, even though Clinton and the Democrats had actually set that strongly into motion.
And so the wheel turns.
Maybe they should just get Bertel to translate Germany’s clunker law into English and hit it with a rubber stamp!
No thanks. It’s buried deeply in the “Gesetz zur Errichtung eines Sondervermögens „Investitions- und Tilgungsfonds“ (ITFG)” and has been amended a few times.
Hoping to not invoke Godwin’s law, Cash4Clunker was invented by the same guy who brought us the Beetle and the Autobahn. 1933, the “Gesetz über Steuerfreiheit für Ersatzbeschaffungen” was enacted after Hitler came to power. The law exempted the buyer of a new car from tax if the old one was crushed. That law failed, the newer version is working like gangbusters.
It gets a combined 35mpg per the EPA, so it isn’t under 18mpg.
That fuel economy number you have is incompatible with the terms of the legislation, which uses current EPA estimate formulas. The formulas for EPA estimates have been revised twice in the interim since 1984 — in 1985 and in 2007.
So 35 mpg from 1984 is approximately the same as 26 mpg under the current system. Still too high to make the cut, though.
@PeteMoran
The money pumped into fuelling inefficient cars over the years rather than other productive purposes (economic expansion, innovative new industry etc etc), from an economic productivity point-of-view, is staggering.
It sure is. The massive wealth transfer that occurred is probably more staggering.
long126mike :
Wait. Are you saying that under the current EPA regs, my car gets 26mpg?
Makes no sense. The car gets a combined 35mpg, just like the EPA said in 1984. How did the fuel economy of the same car from the same year drop by 9mpg??
Stupid EPA. If the car didn’t change, how did the mileage?
It’s moot. They would prefer I drove a smog-belching, emission-control-free Diesel that’s 25 years old? Fine. So it shall be.
Cas-for-clunkers doesn’t bother me so much as what Harry Reid and the other gubbermint theives will attach to it in last minute ammendments and riders. The Omnibus Public Land Management Act was a simple 2 page bill to save Civil War battlefields. Harry, Pelosi and Bingaman ammeded it in the 11th hour with out House having to see it. They had already shot down Reid’s previous package so he just added 1300 pages and 160 bills. It locks Americans out of more than 2 million acres of land in New Mexico, Idaho, Colorado, West Virginia, Virginia, Oregon, California, Michigan, and Utah – the largest addition to the National Wilderness Preservation System in over two decades and one of the biggest public land grabs ever.
It’s perfectly legal do to the fast tracking provisions recently added to the process.
Got a bill you want passed but don’t have the support. Just add it at the las minute!
(Sorry, I don’t have a link but if you are an AMA member, check out this months American Motorcyclist!)
Wait. Are you saying that under the current EPA regs, my car gets 26mpg?
Apparently they think that the new formulas better reflect what people actually get in present-day driving conditions.
Makes no sense. The car gets a combined 35mpg, just like the EPA said in 1984. How did the fuel economy of the same car from the same year drop by 9mpg??
Two possible explanations. One, the new system usually underestimates the fuel economy of diesels in general. For example, the Jetta TDI is rated around 33 mpg, but in real-world conditions it averages probably around 40 mpg, give or take 1 mpg. Two, as the EPA says repeatedly – YMMV (your mileage may vary). You may be a thrifty driver, your mix of driving may favor more highway than city driving relative to norms, or your climate and/or geography are more conducive to better fuel economy. The number they give is just a guide, not a certainty for each individual case.
It’s moot. They would prefer I drove a smog-belching, emission-control-free Diesel that’s 25 years old? Fine. So it shall be.
Well, the bill hasn’t even passed the Senate yet, and even if it does, it has to go to conference, then back to be passed in both chambers and signed into law. A lot can change from this point forth and it may just end up not even becoming law in any form.
Plus, I don’t think the legislation is supposed to be a cure-all, so it may not work for the better in every particular way. What legislation ever does?
Your car may be belchy, but I wouldn’t say it’s free of emission controls. It’s just pretty dirty by modern standards.
It locks Americans out of more than 2 million acres of land
That’s going to be one long 50 foot high wall. We’re all locked out, are we?
Interesting that you single out the standard cast of Democratic demons to blame for this great miscarriage of justice, even though it passed by huge majorities in both chambers — 394-13 in the House originally and 77-20 in the Senate.
Poor Teddy Roosevelt(R) must be rolling in his grave.
At long126mike:
No. I singled out Harry Reid as he is the bills sponsor – along with the other DEMons. I have nothing against the DEMocratic party. (I’s starting to like using the DEM…). This bill, as signed into law, never went to the house. What passed the house was the “The Revolutionary War and War of 1812 Battlefield Protection Act.” The
Omnibus Public Land Management Act of 2009 (S. 22) was added as an ammedment and signed into law without proper deliberation.
The more than 160 public lands bills that have been grouped together by the Senate Majority Leader have now been hidden in HR 146.
In addition, S. 22 will give legislative authority and statutory permanence to the National Landscape Conservation System. The NLCS was created by decree in June 2000 by then Interior Secretary Bruce Babbitt. It effectively removed at least 26 million acres from BLM multiple-use management, giving these lands near-Wilderness status. Federal bureaucrats and environmentalists have longed to give this new land-management system official designation, placing it on a par with the National Park System and preventing future secretaries from opening the lands to even necessary and vital energy exploration.
This massive Omnibus bill would lock up millions of acres of land at the height of an economic recession and at a time the U.S. is struggling to improve energy security. Instead of creating jobs and increasing resources, energy supplies and wealth — it would destroy them. It will shut down cattle grazing, mining, timber harvest, energy exploration and production and recreational OHVs.
And it will add another $10-12 billion of Federal spending.
Hundreds of millions of barrels of recoverable oil and trillions of cubic feet of natural gas will be locked up. It will kill a vital new Liquefied Natural Gas terminal/port in Massachusetts so that Congressman Barney Frank (D) — who frequently rails against oil companies for pushing energy prices higher — won’t have it spoil his view.
Finally, under the Paleontological Resources Preservation Act it makes it a Federal crime to collect or pick up fossils or fossilized rocks on any Federal lands. It will become a Federal crime for school children to collect fossilized sharks’ teeth. And in a scary twist it would extend civil asset forfeiture, permitting the government to seize ownership of all vehicles and equipment used in the gathering of any fossilized material.
Look, I have a vested interest in this subject so I am biased. But I wasn’t slamming the DEMs I was slamming the low-lifes in power and the process they used to get it. Finally, I am ashamed that Obama would sign this bill KNOWING it wasn’t afforded proper deliberation.
No. I singled out Harry Reid as he is the bills sponsor
A Senator is the sponsor of a House bill? Care to amend that statement?
As for S.22, which isn’t the number of the bill that passed, Reid wasn’t the sponsor of that, either.
But, lo and behold, you managed to throw Nancy Pelosi in there, too, because she’s probably one of the 8 or so Democrats in Congress whose name gets repeated by the great echo chamber every day, round-the-clock, so everyone has their set and limited number of people to focus their anger on.
The sponsor of the bill is Rush Holt of New Jersey, a name you don’t even know because he’s not part of that tight little cast.
was added as an ammedment (sic) and signed into law without proper deliberation.
Says who? You? Crying John Boehner?
Also, all the paragraphs in the middle you should mention are not your own writing, but rather come from a right-wing “communications and research foundation.”
http://www.nationalcenter.org/2009/03/omnibus-public-land-management-act-of.html
Look, I have a vested interest in this subject so I am biased. But I wasn’t slamming the DEMs I was slamming the low-lifes in power and the process they used to get it. Finally, I am ashamed that Obama would sign this bill KNOWING it wasn’t afforded proper deliberation.
So, you’re not slamming the Dems, yet still you have yet to manage to name a single Republican by name with whom you’re upset.
I’m still curious as to your use of the phrase “locked out,” as I’m sure it limits some interested parties from using the land as they want, but it now allows other interested parties to perhaps use the land as they want. Such is the nature of our political system to mediate these things. The door certainly swung far to the other side the past 8 years, so this is small potatoes, IMO, compared to what preceded it.
And if you think Congressional Republicans and the former president didn’t jam legislation through without proper deliberation when they were in charge, then you weren’t paying attention in the slightest.
The oil thing is a complete red herring, as are all the points raised about use of natural resources. And the spending numbers are specious and decontextualized.
What exactly is your bias that you mentioned?
PS – Nice that Ridenour brought in another “cast member” for no reason in her commentary — good old Barney Frank. She’s got her propaganda techniques down to a science.
Sorry. As I said, I am biased in this matter and I have let my bias prevent me from being clear to you.
The issue is that a comprehensive land bill, sponsored by Sen. Reid failed. “The House defeated S.22, the Omnibus Public Land Management Act, under Suspension of the Rules on Wednesday, 3/11 morning by a vote of 282 to 144”. Then, “on 3/19/09 the Senate passed H.R.146 which incorporates the text of S.22 as presented to the House” the previous week. “The vote was 77 to 20”. As you said, the 2 page H 146 was “passed by huge majorities” in the House but it was without the 1300 page S.22 amendment later seen in the Senate.
Now, that is perfectly legal under current law. Congress routinely slips in riders to bills likely to pass as part of the fast tracking process. However, what makes this unique is that they slipped in all 1300 pages of S.22, a previously failed bill. This process doesn’t require the House to approve the amendments, next stop, the desk of the Prez.
I included Pelosi and Bingaman as they were both active supporters of the bill per the sites I reviewed. “The bill includes the Taunton River designation in Massachusetts, offered by Representative Barney Frank that will likely block construction of a major Liquefied Natural Gas port (LNG).” I did not include REPublicans as none are listed, however, obviously some voted FOR in both sides of Congress and probably had bills included as well. I am just as disappointed in them.
My bias is that I am active in various sports and activities that utilize public lands: Off-Road sports, canoeing, Paragliding, etc. I am constantly at odd with the “environmental” crowd as they attempt to lock up public lands for thier own uses, however government works like a parent dealintg with 2 spoiled children – they take the toy away from everyone. By making Wilderness areas, canoeists can’t get their boats up river. Paragliders can’t get to the top of the mountain or get picked up when they land, and the motorcycle, ATV, and 4×4 groups loose access to usable terrain. These are just some examples.
I know you are hyper sensitive to the DEM/REP issue and I sympethize. The last 8 years have been just as painful for most REPublicans as we have all lost wealth, liberty, repsect for those in Government.
Now I personally want to appologize to you and those sites I got information from. You are correct that my supporting documentation was cut and pasted. It was from several sites, each with a different gripe with the bill. If they got the info from a single source…I don’t know what to tell you. My only excuse for my plagurism is that I am typing one handed due to injury and I thought it would be easier to get my point across. I have now used parenthasis to indicate my cut and pastes.
Oh just carifiying as requested, Bingaman was the sponsor of S.22 but it was (by his own account) Reid who apended it to H.146 when it came to the Senate.
So is there a list somewhere that shows which vehicles would be conisdered eligible? I drive a 2003 Liberty that gets abysmal mileage. And do they consider the EPA combined mileage for the time of manufacture, or when they “revised” the mileage calculations a few years back? With gas creeping up again, and the general condition of the Liberty starting to show it’s age it would be tempting to take a look at something to replace it with. There are worse things the gov could do with the money than this, I suppose…
I’m assuming that the fueleconomy.gov website is the official MPG figure of merit for this. http://www.fueleconomy.gov/feg/findacar.htm
If your 2003 Jeep Liberty is a 6 cylinder model, it qualifies. 4 cylinder models do not – rated at 19 MPG.
Yes, I’ve printed the fueleconomy.gov page off. It would appear that my Liberty would qualify. Problem is, most of the smaller, more efficient cars are not “American” made. Versa…doesn’t qualify. Fit…doesn’t qualify. Yaris…doesn’t qualify. Astra…hey, it’s badged as a Saturn..but wait, it’s built in Europe…doesn’t qualify. What’s that leave, a Cobalt, Focus or something like a Sebring? Ugh…so what do they expect people to buy as replacements if a large portion of fuel efficient cars don’t qualify for the program?
Plus, I assume this means that the dealer would give you zero for your trade-in. That means the trade-in would need to either be paid off, or that the voucher amount would need to completely pay off the remaining balance for it to have any real effect on a deal for a new car.
I’m not sure which part of that hierarchy of scum, the violence or villainy, appeals to the libertarian.
They’re all for legalized drugs and prostitution but probably wouldn’t want their kids blowing strangers for crack. Funny how they seem blissfully clueless that Libertarianism is just great as long as it doesn’t actually involve real live humans.
Oh and a car reference: my cubicle neighbor has a 2001 Aztec and she, she gets endless amounts of shit about it. The clunker law won’t help her since it gets combined 19mpg.
Now, while I’m sorta behind aspects of the clunker law, any clunker law that doesn’t let somebody unload their Aztec just ain’t right.
EEGeek :
I’m assuming that the fueleconomy.gov website is the official MPG figure of merit for this. http://www.fueleconomy.gov/feg/findacar.htm
Strange but the 5.2 V8 in my 1998 Jeep Grand Cherokee is not listed though I’m sure it qualifies anyway.
If the federal government is willing to dish out more “free” money I’ll take it as I’m in the market for a new car anyway.
I did not see the language stating “assembled in North America” in the version of HR 2751 passed by the House.
I love the overuse of the word “efficient” (it appears at least 26 times in the text of the bill). This is an attempt at stimulating the auto industry, pure and simple.
Let’s call it what it is – not `Consumer Assistance to Recycle and Save Act’ – but something like ‘Consumer Manipulation to Buy New Cars They Likely Don’t Need and Probably Cannot Get Financed Under the Guise of Helping the Environment.’
All I can say is that they need to either push this bill thru or kill it and issue a joint statement that it will not be resurrected. I personally know of at least three people who are in the market for a new vehicle but are waiting on the outcome of legislation before buying.
Off Topic Notification
[/begin rant]
So I realize that due to the government’s heavy involvement in the industry, there is a significant increase in volume of discussion that takes on a political nature…still, I am sick of sifting thru comments that are simply closed-minded support of one’s own preferred party and closed-minded attacking of the opposition political party.
Neither political party as an entity gives the slightest shit about you or your problems. They care about staying in power by any means necessary.
I come here to read about cars and read comments because TTAC is the only site that successfully limited the foreign vs domestic flame-wars…is there no where I can go to stay away from the liberal / progressive / democrat vs conservative / republican flame-wars?
Let’s just talk about cars and the politics directly related to the industry.
Leave your examples of land-use bills, social security, Reid/Pelosi/Frank/Boehner/Carter/Reagan/Clinton/Newt references, libertarianism, and apocalyptic food shortage discussions at the door.
The interweb-thingy has a couple of other sites and I’m sure you can find one that caters to this kind of ridiculous back-and-forth.
[/end rant]
Per the actual bill that passed the House: The trade-in vehicle must be insured and registered to the same owner for at least 1 year.
How many people have a junker worth less than $3,500 or $4,500 that they trade that in for a NEW car? Not many! There is a VERY small number of people that buy a new car and then keep it 15 years and trade for another new car. The other situation that I can think of is the teenager junker where the parents buy new cars for themselves.
As written, this bill will not move very many cars – unless major fraud is allowed. The Liberals that control Congress do not want “the wealthy” to be able to buy clunkers from poor people – so that the “wealthy” benefit from this plan. As written, however, the poor people with the clunkers can not afford to purchase a new car. Also, in general, this Bill is extremely complicated and very difficult to understand.
From the Bill:
7) the term `eligible trade-in vehicle’ means an automobile or a work truck (as such terms are defined in section 32901(a) of title 49, United States Code) that, at the time it is presented for trade-in under this Act–
(A) is in drivable condition;
(B) has been continuously insured consistent with the applicable State law and registered to the same owner for a period of not less than 1 year immediately prior to such trade-in;
(C) was manufactured in model year 1984 or later; and
(D) in the case of an automobile, has a combined fuel economy value of 18 miles per gallon or less;
I think it would be a problem if they did not have the “registered to the same owner” limitation.
Craigslist and Ebay and Autotrader would melt down with the people rushing to buy some clunker from some fool that doesn’t read the news just so they could drive it across town an hour later and get their taxpayer cash.
Then a week or two later when Grandma tells the kids about the nice guy that took her car off her hands, they will get all upset at the injustice of it all, since certainly THEY would have handled that taxpayer money better than some stranger.
Oddly enough, my 18 year old Honda qualifies as built in North America but gets way too high mileage to qualify. Not that I want to trade it in on some of what that passes for a new car right now.
I think the concerns about fraud are slightly overblown. If somebody buys a clunker from an unsuspecting shlub for $500, he gets to go down to the new car dealer and buy a brand new car, for which he might get $3500-4500 knocked off (by way of voucher). Big deal…he still has to make the car payment month after month. Heck, it might be better for the guy selling the car to get the $500 since he might not be able to even afford a new car to begin with. And given that the car must be continuously registered to one person prior to trade, that will preclude alot of people from jumping on this, since the program will only run for as long as it is funded.
How many people have a junker worth less than $3,500 or $4,500 that they trade that in for a NEW car? Not many! There is a VERY small number of people that buy a new car and then keep it 15 years and trade for another new car
Many new cars are ~$18k or under, and many “middle-class” people still drive around in 90’s automobiles. I’m not sure what the point of this criticism is.
The plan tries to tackle the intersection of two problems: old polluters and new car sales. If you don’t think that scope is wide enough, propose an alternative.
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Then a week or two later when Grandma tells the kids about the nice guy that took her car off her hands, they will get all upset at the injustice of it all, since certainly THEY would have handled that taxpayer money better than some stranger.
I highly recommend reading the comments before posting them. The 1 year ownership requirement is right above.
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Copied from the Zimbabwe master plan.
I get it, because he’s black!
I come here to read about cars and read comments because TTAC is the only site that successfully limited the foreign vs domestic flame-wars…is there no where I can go to stay away from the liberal / progressive / democrat vs conservative / republican flame-wars?
If you will notice, the “flame-war” begins with current fed policies and actions as interpreted by their political opposition.
This is not a unique creation of this site but a phenomenon that poisons all of society and as such should be address since it’s root cause of many comments here.
I think most readers would agree it’s been tackled here much more effectively and conclusively than in all of mass media as a whole. Thus it may greatly benefit your understanding of the background of much auto-related news if you actually read it carefully.
I highly recommend reading the comments before posting them. The 1 year ownership requirement is right above.
Which is why my comment began with “I think it would be a problem if they did not have the “registered to the same owner” limitation.”
Speaking of reading comments ;)
Texas (some counties) had a similar program in the recent past, and we decided it wasn’t worth the hassle when it was time to sell a relatives car that they didn’t need anymore.
We weren’t trying to replace the car, and the so-called “cash” was really a credit when you purchased a new car from an approved dealership. We sold it to some kid who needed it for college.
Note the Texas scheme said “registered in participating county are for 12 months,” not the same owner. That keeps you from going to Louisiana and bringing a car over (that is basically going to a lanfill) and getting the money. Politicians like to put limits on how other people use tax money :)
I fail at speed reading. :)
In general congressional bills themselves are verbose. Hopefully the language can be distill down to a few broad rules, or even better, a website where you can enter your vin or exact model and get all necessary info.
I don’t know if this will really let you get a car for much less than you can now. You can get invoice on most cars today, which can knock off around $2,000. Any dealer who sees you with a voucher is not going to give you invoice pricing. I also wonder if manufacturers will pull back on incentives, which are available on most vehicles. Dealers and manufacturers could stand to gain a lot from this bill.
agenthex: Speaking of anarchy and illegal drugs, outside of some external enforcement, it’s correct that the illicit drug trade is one of the prime examples of what happens in a real free market.
The federal government has banned the production, possession and use of certain drugs. It actively and aggressively enforces those laws.
The drug market is anything but “free.” The only way it could be any less “free” is if the government completely controlled the manufacture and distribution of the product.
long126mike: Unfortunately for him, this resulted in big price run-ups in gasoline, which set off the whole inflation problem and necessitated interest rate increases to try and put a lid on the inflation.
Inflation began heating up in 1977…at that point, President Carter hadn’t been in office long enough for this “deal” to have an effect on the inflation rate.
long1256mike: Lucky for him CAFE worked so well in moderating consumption, that coupled with the recession, it kneecapped OPEC in the mid 1980s and the US (and the world) got 20 years of very cheap oil to fuel the economic booms they enjoyed.
CAFE had nothing to do with it. In the wake of the Iranian Revolution in early 1979, small car sales were hot, which depressed demand for gasoline.
The severe economic recession of 1980-82 further depressed demand for gasoline.
When the economy recovered in 1983, and sales of bigger vehicles recovered with it, the price of gasoline continued to fall. Gasoline prices continued to fall – even though the CAFE standards were never raised, and the stupid 55 mph speed limit was raised to 65 mph in the late 1980s (and then mercifully abolished in late 1994), and gasoline consumption and total miles driven continued to increase.
By the late 1990s, I was paying $1 a gallon for unleaded, and even today, gasoline is still inexpensive in relation to income.
grog: They’re all for legalized drugs and prostitution but probably wouldn’t want their kids blowing strangers for crack.
Just because a person doesn’t believe that others should be penalized for engaging in certain actions doesn’t necessarily mean that he or she wants to engage in them, or would approve if his or her children engage in them.
Libertarians just believe that whether to engage in said activities is a PERSONAL decision, and the government has no business making it illegal.
People who don’t want their children to use drugs need to model those lessons in the home, not depend on the government to prevent drug use (especially considering that any reasonably intelligent teenager who wants to buy illegal drugs can easily do so, despite government prohibitions).
long126mike :
June 9th, 2009 at 9:57 pm
And you can forget about this thing being used to buy fuel misers. Look at this crap:
Forget about the class 2 and class 3 trucks for a moment, and assume that an equal number of truck/suv and car owners trade in their vehicles to the bare minimum threshold. If the average miles driven is 10K miles per year, the fuel savings in that year is about 85 million gallons, split about 3:5 trucks to cars.
Over an average vehicle lifespan, and at current gas prices, the value of the gas savings is $4.6 billion, or more than the cost of the program itself.
Granted, the people participating in the program are getting all that money directly, but that is $4.6 billion that would otherwise go 2/3 to foreign oil producing nations.
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1) Your calculation ignored a lot of things. My calculation shows a different conclusion:
The incentive is about the price of 1k gallon of gasoline. Assume that the life expectancy of the new car is 120k miles; the fuel economy of the old car is 18 mpg. (very common numbers)
So, if the new car has the same mpg as the old one, it will consume 6667 gallons during its lifetime. If it were to save 1k gallons to make the incentive make sense, it will use 5667 gallons. The new figure would be 21 mpg. Again, sounds reasonable and optimistic (since only 2mpg improvement is required).
This program makes sense if we stop here. But we cannot!
What’s residual value of that perfectly functioning scraped car?
What’s the cost to the economy to buy the new car, since it’s not a necessary purchase? The money could instead be spent on a house to create jobs in the house industry, for example.
What’s the environment impact by scraping a functioning car? The pollution cause by coal-electricity used to melt the aluminum use in the new car?
Wow, I didn’t mean to step into this conversation. But here I am.
I would have to disagree with the 120k figure. Even with accidents, floods, errant drivers, and abuse par excellence, I would think the average is closer to around 160k to 170k.
Keep in mind that the average car on the road is already over nine years old and average driving these days is between 12k and 15k per annum.
There is also the ‘use of energy’ that comes with assembling the car… as you’ve mentioned. But a lot of the parts that get crushed are recycled. I believe the figure is somewhere between 60% and 70% of the raw materials (steel, platinum, iron, gold, etc.) are recycled with steel leading the pack.
To me, it would make more sense to simply subsidize a class of vehicles and have it available to all… while constraining the manufacturer’s ability to gouge the public. However that’s near impossible to do in this day and age.
My solution? Don’t do it. Let the market correct itself.
Steven, OK, let’s assume it’s 180k. Then, the new car need to reach about 20 mpg (1 down from 21).
Your “60% and 70% of the raw materials (steel, platinum, iron, gold, etc.)” argument is invalid, because those materials won’t disappear if you don’t scrap the old car immediately. They will be recycled later, maybe after 5 additional years of service.
Looks like my friends 1986 Voyager will be eligible.
Don’t know if he can afford a new car but a $4500 down payment would help
I agree with that. In fact, I was trying to defend the fact that this really wouldn’t waste much in overall materials.
You do have to include the energy used for constructing the vehicle which, for now, seems to represent 14% of the overall energy the vehicle will use in it’s lifetime. But even so, the economics on paper seem to be good.
It’s what happens once the government handles it which worries me. I would entrust it to a non-profit that already has a very sophisticated auditing system in place.
stupid stupid idea.
i bought a fuel efficient car 10 years ago, i am now being penelized.
i never buy new cars. Never. I do not want to spend the money.
This will end up benefiting people with newish cars who can afford new ones with no help. It will have no affect on the army of ratty old junkers driven by poor folks.
Stupid insulting idea. I cannot beleive its actually being bantered.
I am a New Car Salesman (yes on of those guys) here in San Diego, Ca. We had a good month at the dealership in July and August. Took in close to 100 C4C trades so far. ONLY problem is our dealership has YET tot be paid for any of them. We have had to hire three temps JUST to do the paper work. We have about 70 transactions in “review”, three have been declined AFTER we got the Auth from their computer.
As a sales rep I will not get paid on the 13 sales I have made till the Government pays the Dealership and the deals have cleared. I am being assured that this SHOULD be by the end of 2009.
I am hoping my utility companies and mortgage company understand that I will be able to pay my bills once the Government pays the Dealership so they can pay me. I am sure the Utility Companies will be compassionate and allow me to run my bills up till no later than the end of 2009.
This program has been a DISASTER for us. The public doesn’t understand what qualifies as a clunker, they DON’T want to have to buy the cars that qualify for the program and the banks are declining loan applications on these deals as fast as we submit them.
We don’t dare destroy the cars right now, because if the Government will not fund us we have no way to wholesale or auction the vehicles to try and recoup the dealerships investment.
ALL the sales reps are upset that they are not getting paid in a timely manner and the customers are really going to be pissed when they have to return the cars because their loan got declined or the Government FAILS to pay the dealerships.
Give this 60 days and the Dealers LAW SUITS will begin!
This program has been a DISASTER for us. The public doesn’t understand what qualifies as a clunker, they DON’T want to have to buy the cars that qualify for the program and the banks are declining loan applications on these deals as fast as we submit them.
This doesn’t even make sense. It’s the dealer’s job to make sure the requirements are explained and met (and therefore they will get their money after proper validation) before everyone signs off.
Don’t go blaming everyone else because your employer is either a dumbass or crook.
Gee, I wonder if the taxpayers will get a thank-you note from whiners like these after all those customers got driven your way.