Never one to miss a chance to put a left/right slant on, well, anything, today’s New York Times contains an editorial claiming that the Cash for Clunkers (a.k.a. C.A.R.S.) program is a triumph of the Obama administration over Republican naysayers/hypocrites/rat bastards. Blogger Timothy Egan begins by suggesting that C4C is a Republican-style economic stimulus thingie, then excoriates the elephant party for not loving it long time. “They hate it, many of these Republicans, because it’s a huge hit. It’s working as planned, and this cannot stand. America must fail in order for President Obama to fail. Don’t be surprised if the tea party goons now being dispatched to shout down town hall forums on health care start showing up at your car dealers, megaphones in hand.” Incendiary much? I’ll have mine with a side order of sarcasm, please. “But try to give struggling families a one-time boost to buy a more fuel-efficient car, with an amount that wouldn’t pay for paper clips at A.I.G., and it’s . . . outrageous!”
That said, like many on the left who hate big business with a passion undimmed and view industry-favoring legislation as evil, Egan is way conflicted. But you don’t write for the Times for eighteen years without learning a thing or two about wiggling.
I don’t like that big agriculture gets rewarded for monopolizing rural economies while stuffing nearly every processed food with the dreaded high-fructose corn syrup. I was against giving $35 billion in federal help for oil and gas companies over the next five years, as Republicans advocated during last year’s campaign.
For that matter, I hate to see small independent book stores disappear from the landscape.
But Cash for Clunkers is a bare slight against free market chastity. It’s simple stimulus, caught up in a much larger system that’s always been there for the big money players, but holds a much higher standard for anyone else.
One should never let principles stand in the way of pragmatism. Apparently.
The 5.0 and ZJ look both in good condition…
I don’t believe in handouts or bailouts. Just because the farmers and others get bailouts, doesn’t justify them IMO. The C4C will be a bonanza for the asians and a lift for detroit.
“Incendiary much?”
What, an automotive opinion piece using provocative language? How dare they!
As a “conservative”, it is disappointing to see Republicans trying to outdo the Democrats in giveaway programs. I can’t defend them when they do it.
Both parties were guilty during the bailout frenzy.
One might argue that tax breaks benefit only a few people (a viewpoint I disagree with), but giveaways undoubtedly burden everybody.
Robert,
Coming from a liberal rag that’s about to file for bankruptcy, I’d expect nothing less. Wonder what the Washington Slimes has to say about it?
I think Mr. Egan’s article was spot on.
Tell me again why it’s a bad thing to spend $3 billion on stimulating the economy when we’ve spent trillions in Iraq with absolutely no gain.
I’d rather MY taxes dollars go to stimulating OUR economy.
With all due respect, Egan is a blogger, not a member of the Times editorial board. Are these not being unfairly conflated? As for the canard about the Times or for that matter everyone on the left being despisers of the business world, I can say from personal experience that that is not born out in the real world. What many people on the left have a problem with is the idea of business as religion. (Strenuous apologists for various forms of business malfeasance suggests that the religious tack is not such an exageration.) Personally, I feel that ethically and capably conducted business is a high calling indeed and nothing whatever to be denigrated. After all, where ever would we be without our business and industry? Likely speaking German, no?
Reading the C.A.R.S. “clunker” legislation, the program details reveal that a significant amount of the $1 billion program’s funding is used by Department of Transportation (DOT) to administer the program.
First, DOT created and staffed an entirely new organization with three divisions to administer the clunkers program.
Second, the funding was allocated to cover extensive Help Desk telephonic support, promotional materials, mailers, travel, Web site development and maintenance. Plus, extensive administrative and managerial staffing was also funded. There is staffing to manage the contracts, to review the auto dealer submissions, to develop Executive Branch and Congressional reporting, and to provide investigatory oversight for the program.
Federal government staffing for 3 divisions doesn’t come cheaply. Add to it other administrative and overhead costs for office space, telecommunications, power, equipment and furniture, as well as costs for meetings, photocopying, paper, pens, help desk support. When the government’s costs of running the program are totaled up, each clunker is likely to cost taxpayers around $6,000 per car.
-Lurita Doan, 8/5/09
Casual Observer, I read that the actual cost per car to the taxpayer (deficit) is $47,000 for a $4500 discount to the recipient.
Typical government operation, really. Very typical.
Which, MMH, is why it’s important that we all have a civilized discussion about how or whether the new $1.3 TRILLION dollar extra deficit added just over the last 7 months, should be spent before adding another $1.5 TRILLION onto it over the next few years.
I’m just sayin’ – it’s all related.
If the politicians don’t stop spending, we won’t have a country – never mind, cars to enjoy. We’ll be BROKE. (Oh, wait; we already are. Even The One admitted it).
Robert Farago: Blogger Timothy Egan begins by suggesting that C4C is a Republican-style economic stimulus thingie, the excoriates the donkey party for not loving it long time.
I believe you mean the elephant party. The symbol for the Democrats is the donkey; the symbol for the Republicans is the elephant.
Mr. Egan’s proclamation that the program is a “hit” is very premature. It may have just pulled forward sales that would have happened anyway. We should know around October.
This line from Mr. Egan is disingenous: “But try to give struggling families a one-time boost to buy a more fuel-efficient car, with an amount that wouldn’t pay for paper clips at A.I.G., and it’s … outrageous!”
If certain families are really “struggling,” they don’t need to start paying on a brand-new car. They were better off keeping the old gas-guzzler, unless the wheels were ready to fall off, and even then, a used car was probably a better deal. That is Budgeting 101.
People buying stuff that they really can’t afford is part of what got us into this mess in the first place.
Somewhere between politics and economics lies the truth.
I wouldn’t mind the current program if…
1) We had a balanced budget.
2) The plan was open to everyone… who would have to pursue an MPG improvement of at least 10 mpg for cars and 5 mpg for trucks… or alternatively 20 mpg highway minimum for a truck and 30 mpg cars.
3) Everyone could do it one time, and have the amount applied as a tax credit instead of a rebate. Thereby putting the burden of auditing directly on the IRS. That would be far more cost effective than constructing a new fed division for auditing from the ground up.
I empathize with the folks who want to get their share of the current giveaways. But thievery of future generations under the guise of good government is still theft.
Casual Observer, I read that the actual cost per car to the taxpayer (deficit) is $47,000 for a $4500 discount to the recipient.
You read it. So it must be true.
To be sure, there are issues with C4C. Putting aside the philosophical issue of whether or not government should spend tax dollars on anything whatsoever (some people/groups being favored over others? I’m shocked, shocked I tell you!), unlike a lot of other government programs this one has clearly met some of its goals. People are buying cars and more fuel-efficient cars ones at that.
One more point: The New York Times is not what it was. But it’s a necessary part of our democracy that will be sorely missed should it disappear.
FWIW, I believe c4c, and the bailouts of GM and Chrysler are doing an outstanding job at masking real market driven supply/demand. Obama, the majority party and the minority party have all gone along to create yet another economic bubble that will pop. I know, it’s all about the jobs. YES! Of course.
I realize that most republicans only believe in subsidizing the rich, and ‘let them eat cake’ and let whatever crumbs are leftover to ‘trickle down’ or some such garbage (you flip my burgers for minimum wage, I’ll keep all the profits, and you just be thankful for the opportunity the ‘free market’ has provided you)…but many of the comments on this thread are truly beyond delusional…
Anyone who watches any network OTHER than Faux News is aware that Cash for Clunkers has been the most effective direct stimulus yet, benefitting the ‘common man’ as well as big business. Should be construed as a win-win, but unless ALL the monney goes to corporate interests or the already rich, some will never be satisfied.
Say what you want about the current ‘regime’, the fact remains that 8 years of failed republican economic policies had driven our economy to the brink of collapse. Obama inherited a crisis not of his making. Old-school business as usual policies (benefitting the few, the well-connected, and robber-barrons only, while p*ssing on everyone else) is a failed ideology.
There is still room for free market competition and rewarding hard work and initiative, but when the rules of play are patently unfair, and the rewards are shared by so few…massive reform, and new strategies are called for.
*** BREAKING NEWS ***
The Dept of Housing & Urban Development has just announced a Cash for Condo’s program.
Your NEW condo must be situated in the urban core and measure less than 500 sq ft.
Your OLD condo must be built between 1980 and 1990 and at least 1000 sq ft. Yes, I know it has usable life left, but come on the construction industry needs jobs!
To receive the credit, simply torch your old place and apply at your nearest Public Housing office.
@sfdennis1:
Clunkers has been the most effective direct stimulus yet, benefitting the ‘common man’ as well as big business.
This would be a true statement if it could be proven that consumers are paying less (net) for vehicles. Any evidence of this?
Casual Observer:
I wonder how much of the money allocated is used for overhead versus direct benefits?
When it comes to charities, you can get information about how efficient they are with their contributions. If they spend 90 cents on the dollar in overhead, they don’t get my money.
I wonder if there is a similar metric for government programs such as this?
Steven Lang: we have something similar to what you’re proposing in BC. Its called the Scrap-It program and it has been out for a while now, although a lot of people don’t know about it.
What’s cool is that you can ditch your beater and get money for not just new cars, but used cars, bus passes, credits with car share and ride share organizations, or even a bicycle if you’re so inclined.
The amount of the credit is proportional to the CO2 reduction. As long as you replace your beater with something that emits less CO2 you’ll get something. The maximum is $1250, so it isn’t a huge stimulus for anything but the most run down of beaters.
unlike a lot of other government programs this one has clearly met some of its goals
Really. What are the goals of this program? This is nowhere to be found in any of the text of the bill or its website.
Sell more cars? How many more? Help GM? How? Improve the environment? Help poor people? How many poor people?
How long will the program continue? How much fraud has been detected so far and what has been done to correct that?
These are all fair questions that no one seems to be asking.
Just more lack of accountability….
These are all fair questions that no one seems to be asking.
You have to be kidding, right? No one seems to be asking? Is that your perception of the debate that surrounds this program?
But that’s the whole problem, isn’t it? As others have said (both from the right and the left) we’ve elevated hyperbole so high that you’d need a space elevator to reach its level. We have an endless supply of shouted questions that serve only to drown out the answers. This is a poor substitute for substantive debates.
And, yes, the programs has boosted car sales. That’s indisputable. Go ask any dealer.
I do not claim to be an expert on CFC, but the obvious goals and benefits are many…reduced fuel consumption, reduced pollution/emissions, getting older/less safe cars off the road, keeping auto-industry jobs, stimulating sales (and the balance sheet of automakers).
As a Libertarian and a firm believer in free market, I would accept to have a debate with any leftist/democrat out there.
But I wouldn’t want to be associated in any way with any of these hypocrite republican/self_proclaimed_conservative, currently very vocal, but very quiet during the Bush years when trillions were pissed away.
Cash for clunkers criticism is legitimate- as long as it doesn’t come from any of these hypocrites.
I object to the “cash for clunkers” deal for the following reasons:
1. We are favoring one segment of the population (those who have cars that meet the criteria in the law). I am not eligible for no reason other than that I already drive a fuel efficient car. This is unequal protection/benefit of the law, and is unconstitutional for that reason.
2. My tax money is being given to other people without my consent.
3. Perfectly servicable/usable vehicles and engines are being wastefully destroyed.
4. Many of the people benefitting from this deal are those exact same people who can’t afford a new car. I can’t feel empathy for them, because they should be buying good used cars until they can afford better. This is what I did when I couldn’t afford new cars.
5. This is a repeat of the mortgage mistake. I wonder how many of the C4C beneficiaries also qualified for mortgages they never should have been approved for, then received mortgage bailouts, which also came from my tax dollars without my consent.
6. What happens when the C4C beneficiaries decide to stop making their car payments? Will my tax dollars again be raided (or will my taxes be raised) to make those payments for the very same people who simply cannot afford new cars, discounted by $4500 or not?
bunkie: And, yes, the programs has boosted car sales. That’s indisputable. Go ask any dealer.
The question that I am asking is what will sales be like in October, November or December?
What I want to know is whether the program is really boosting demand, or just pulling ahead sales that would have happened anyway.
No one here knows that yet – not you, not me, not the blogger – so it’s very premature to hail the program as a success or a failure.
sfdennis: Hope that you were as demanding of “accountability” when Halliburton, Blackwater, Big Oil, Corporate Agriculture, Healthcare giants, and myriad other Repulican favorites were making off with HUNDREDS of billions of taxpayer dollars in no-bid contracts, corporate welfare, backroom negotiations, sweatheart deals, etc.
The idea that these tax breaks or other deals for industries or selected corporations are only favored by Republicans is a myth.
And there was plenty of favoritism and shady dealing occurring prior to January 21, 2001. Only partisans believe otherwise.
@gslippy
as basically said in my previous post,
so much of your money has already been (mis)used for so many big-business friendly (and/or war-mongering, and/or environmentally harmful causes etc) that I hope you’ve been complaining very loudly every time some new corporate welfare deal gets made…and not just blaming this administration for attempting to stimulate the economy in a manner which might benefit people OTHER than the top 2% wealthiest of the population.
If you’ve been complaining loudly and consistently for many years, kudos. Though please also be aware that things like your mortgage interest tax deduction (if you own a home) is a direct government ‘subsidy’ to you…I’m not a homeowner, so am I subsidizing homeowners’ financial benefit because I don’t get a tax deduction?
If you’ve accepted other government ‘assistance’ and are only complaining now, that might appear hypocritical.
This would be a true statement if it could be proven that consumers are paying less (net) for vehicles. Any evidence of this?
In my case, I am ahead at least two grand compared to making the deal for my car under normal circumstances. I know that for my car, a Jetta TDI Sportwagen, supply was so short that many dealers were selling them over MSRP. CFC or not. I got mine for MSRP. The $4500 I got for my trade is easily 2K more than the open market would have borne for it.
Not only that, but I would NEVER NEVER NEVER have bought a new car were it not for CFC.
Can’t speak for other clunkerees though.
“No one here knows that yet – not you, not me, not the blogger – so it’s very premature to hail the program as a success or a failure.”
The intention of the program was to sell more cars and trucks now and help yank the industry out of a tailspin. That is in fact being accomplished and the program is successfully doing what it was intended to do. What it means down the road is something we will not know for certain until we get down the road. Opinions vary, and a year from now one side or the other will get to say I told you so. But at this point nobody knows with any certainty.
Now I have a question for the most vociferous critics of the C4C program: What would you be saying if fewer than 10,000 units had been sold since it kicked off instead of over 200,000?
Spewing hatred, anger and apocalyptic prophecies does not add anything useful to the public debate.
What I want to know is whether the program is really boosting demand, or just pulling ahead sales that would have happened anyway.
No one here knows that yet – not you, not me, not the blogger – so it’s very premature to hail the program as a success or a failure.
Now that’s a fair question. As I said there are concerns. I would speculate that it’s a mix, some who would not have bought a new car will do so and some who planned a purchase later will accelerate it. But having said that, there are some real-world advantages. First, there’s fuel efficiency. It’s very chic to bash the idea of government efforts to promote this, but there will be a real, lasting effect for years to come. Second, the boost in sales in the short term will help to loosen credit markets as nothing lubricates the wheels like cash movement. This will definitely have a multiplier effect on the economy as a whole.
And here’s the real issue, as I see it: Despite what one might think of the efforts of our government, we will all certainly stand to lose if those efforts fail. Let’s debate policy and practice, not rub our hands gleefully hoping for failure simply to prove a political point.
@jkross22
I can respect your point of view, and the fact that you ‘saw the light’ in 2002 is great.
This probably won’t satisfy either, but specific goals are something of a ‘luxury’ when your house is on fire. The only goal is to get some damn water flowing ASAP, and put the fire out before your entire house is destroyed…
I would posit that previous failed economic policy brought our economy to the brink of collapse, and while I don’t give Obama or his minions a total pass at all on the economy, I do believe that CFC has had a direct payoff in stimulating consumer spending, in (perhaps short term)jobs protection, and corporate bottom lines. (and other benefits, reduced fuel consumption, reduced pollution, safer cars on the road, etc) also pay dividends to our collective societal needs.
What price is worth reducing our dependency on foreign oil, and sending less money to unfriendly regimes, or to terrorists? What amount is worth lessening the amount of toxic pollutants spewed out? Hard to say, but those benefits are real, and tangible, even if the exact dollar amount is hard to quantify.
Have to leave TTAC for the day. Peace.
ZoomZoom:
I object to the “cash for clunkers” deal for the following reasons:
…
1… I am not eligible for no reason other than that I already drive a fuel efficient car.
+1. I can sympathize – I share your circumstances.
2. My tax money is being given to other people without my consent.
Sorry, but that’s hardly an argument. ALL tax money is taken without consent and used in ways some taxpayers disagree.
Tax dollars for Haliburton contracts for successful 100 percent defense of State Dept employees or tax dollars for Eli Lily to provide POS welfare recipients in NY free Cialis are examples that many people on both political sides disagree with.
3. Perfectly servicable/usable vehicles and engines are being wastefully destroyed.
+1. As a previous owner of old trucks for actual hauling, that does grind my gears.
5. This is a repeat of the mortgage mistake.
No. There’s not enough money in the program to cause that much distortion. Degenerate firms like Fannie and Freddie exposed the taxpayer to hundreds of times the risk of C4C.
The (legal) scam that makes me laugh is the smart budgeting, rural type who owns an older truck or two. This person C4C’s a truck & pays cash for a popular small car that he then rarely drives. Then, when C4C ends, he waits a few months and sells the small car for a nice profit. Then, he has a nice down payment on a new/used truck.
OK this is out of control.
Scorched earth people.
And that’s why I like the Morgan Aero 8.
Goodness sakes, some folks see straw men and stereotypes everywhere. I suppose that’s to be expected when our educational institutions don’t demand careful and critical thought.
When I was doing program evaluations we joked among ourselves that introductory interviews went like this:
“Please provide us with your measurable goals.”
“To serve the people.”
“No, I mean goals with quantitative standards.”
“Ummm … to serve 100% of the people!”
My problem with the program is if you are a “struggling family”, meaning you’ve either lost your house, one or more jobs, getting $3000 when you have to invest $10,000-$20,000 (or more) for a new car is not a wise purchase. If your ride is worthless you’re better off just buying a nice used car for $6-8k and not putting yourself so deeply in debt (remember, you’re “struggling”). And if you have a vehicle worth more than the C4C allows, the program is useless anyways.
(most rides are worth $1000, since they have to be insured and have to run, so $4000-4500 allowance less the $1000 the vehicle is worth)
What it means down the road is something we will not know for certain until we get down the road. Opinions vary, and a year from now one side or the other will get to say I told you so. But at this point nobody knows with any certainty.
Even in the “worst” case, if it only pulled sales forward, it’s still a net gain.
One of the main principle of modern economic management is to minimize the turbulence of business cycles.
—
The idea that these tax breaks or other deals for industries or selected corporations are only favored by Republicans is a myth.
You’re absolutely right. The blue party has been learning corporatism from the red party ever since they took winning seriously. You can’t win major elections (or even get on the map) in this country without the significant capital backing in form of media PR and contributions.
Obama is thus in every sense a centrist (and center-right by international standards) politician, which make the winger accusations positively point-and-laugh hilarious.
—
I’ll let you guys into a little political game theory secret. When you define the “truth” as somewhere in between two parties instead of objectively, the party with the more stretched-out insane rhetoric tends to benefit. In such a system, it doesn’t pay to right, but it does pay to be deceitful to the very limit of what is believable, since the peeps’ll always think the truth is halfway there.
This is why you’ll always find that the batshit crazies favor that idiotic relative definition of what is true, often as a form of bargaining.
—
This person C4C’s a truck & pays cash for a popular small car that he then rarely drives. Then, when C4C ends, he waits a few months and sells the small car for a nice profit.
He’s going to be out tax/title/registration, plus significant depreciation, plus whatever the “clunker” is worth (which must be something given it needed to be insured). He would make maybe a thousand dollars at best.
My problem with the program is if you are a “struggling family”, meaning you’ve either lost your house, one or more jobs, getting $3000 when you have to invest $10,000-$20,000 (or more) for a new car is not a wise purchase.
The benefit is not directly to the “struggling family”. The incentive is for the people who are still reasonably well off, but reluctant to part with the money whose recirculation the economy depends on.
The benefit is a systematic one (much in the same sense that the economic downturn is a systematic problem), which I see a lot of people are having trouble conceptualizing.
@ agenthex
The benefit is a systematic one …. which I see a lot of people are having trouble conceptualizing.
Amen to that. Geez.
+1 agenthex. The point of this program isn’t to get the people who are barely getting by to buy a new car. The point is to encourage people who have the money to spare to get it moving. Money which isn’t circulating is almost as useful as a blood clot.
I for one absolutely love the Cash for Clunkers deal, and would like to see it extended into other areas. Why not expand the program to include relationships not just with inanimate objects like cars, but to more human relationships?
Let’s say — and I’m just thinking out loud here — Congress were to pay me $4,500 to trade in my high maintenance 40 year old wife for, say, two 20-year old models? That would seem like a deal both Democrats and Republicans could get behind.
Right, I understand the program isn’t to help those barely getting by. But that’s not what the NY Times article is arguing. The NY Times author directly calls it help for:
“but try to give struggling families a one-time boost to buy a more fuel-efficient car, with an amount that wouldn’t pay for…..”
I was mainly trying to point out the ridiculousness of the NY Times article.
Context is important. He wasn’t talking about “struggling families” via comparison to other families who aren’t struggling, he was comparing families (ie the little people) in general to corporate wealth (eg. AIG bonuses).
The writer uses a bit of hyperbole to get the point across, but he’s mostly right on this (the part cut off from you quote is “with an amount that wouldn’t pay for paper clips at A.I.G., and it’s … outrageous!”).
Again, the point isn’t that C4C is for the poorest people, but that wingers are bitching about it because it’s a government handout which didn’t end up going to the top 1-5% of the population as is usually the case.
Let’s stop playing politics for a moment. America is $1.4 TRILLION in the hole… I’m tired of subsidizing someone who bought a big house they couldn’t afford, a big ass SUV to park outside they can’t gas up, or a speculator who made the wrong gamble on the markets.
Let people learn the harsh reality of “it seemed a good idea at the time.” Build a man a fire, and he’s warm for a day. SET a man on fire and he’s warm for the rest of his life.
We all have the right to get burned, and sometimes we need to. C4C is a joke.
@sfdennis:
Let me get this straight… you think setting specific, measurable goals and using those results to determine if a program is working is a luxury?
If you have no way of knowing whether a program is succeeding or failing, you shouldn’t be doing the project. Full stop.
Seems like you believe that one of the goals of this program is environmental. If that’s the case, let’s have the government subsidize the price of fruits and vegetables, and also encourage a vegetarian diet, because our consumption of animal products is a much larger contributor to environmental problems than cars.
http://www.sciencenews.org/view/generic/id/40934/title/AAAS_Climate-friendly_dining_%E2%80%A6_meats
If the goal of this program is to reduce consumption of oil, this could have been done much less expensively with a tax credit. How ’bout this: the higher the mileage, the bigger the credit!
Instead, we have a fatally flawed bill that will now end up costing the taxpayers $3B with no set objectives.
Saying that C4C is doing some good isn’t good enough. Are we getting $3B in value out of this bill? How would we know?
This bill is doing little more than giving demand a purple nurple and taking sales from the future all on the backs of the taxpayers, 10% of which are out of work.
If you have no way of knowing whether a program is succeeding or failing, you shouldn’t be doing the project. Full stop.
The main goal of economic stimulus is pretty clear, and consistent with similar programs already in effect internationally. A large number of posts above discuss this, so I’m not sure why there needs to be any more confusion. In general, repeating the same winger talking points is only effective if other don’t catch on.
—
Saying that C4C is doing some good isn’t good enough. Are we getting $3B in value out of this bill? How would we know?
The increase in monthly car sales in the US and elsewhere is measurable. Peripheral goals like increased fuel economy of the newly purchased cars is simple to compare. Of course, if you want a more nuanced calculation, that would be more difficult as are all things economics. However, crying ignorance on part of others is more a reflection of yourself (or rather your ill-informed sources).
Finally, this is the perfect case to illustrate why a tax “cut” is ineffective. The general proponent of these are that they would be spent and therefore contribute to economic activity. It’s plain to see that the problem is hesitance to spend in the first place, and throwing more money down the same trap is not a solution. On the other hand, a clever scheme like the publicity around C4C has shown to be extremely effective at loosening purse-strings.
Then, when C4C ends, he waits a few months and sells the small car for a nice profit. Then, he has a nice down payment on a new/used truck.…
Or will he? Tax, tags, etc was mentioned above, but what about real resale? Don’t you think that resale values are going to take a hit? Especially if many of these cars end up for sale in the short term…
@jkross22
Not sure the “subsidizing agriculture and fruit/vegetable consumers” is the best analogy.
Firstly, agriculture is already so heavily subsidized (including huge corporate farming giveaways so popular in rural areas/Red States) that it’s hard to imaging how they could give more money away…tho I’m sure lobbyists will try to find a way.
Second, there is not a “lack of consumer spending on vegetables” crisis creating a vegetable glut…but there definitely was a car buying crisis, putting manufacturers, dealers, and suppliers all on the brink.
Agreed that the program is flawed, but it has had a stimulatory effect in an industry facing crisis. And perfection and Washington DC rarely, if ever, meet on the same page. You try getting “perfection” passed in DC, I’m not going to hold my breath.
It’s clear we’re not going to agree on this…but given Washington’s long history of incredibly stupid spending and fiscal policy, CFC is only “mildly” stupid by comparison, and in contrast to many other vast mistakes, has actually had some demonstrable benefit(s).
@ zoomzoom
> This is unequal protection…, and is unconstitutional for that reason.
This actually made me laugh out loud. People who drive fuel-efficient cars aren’t a protected class. Good luck convincing a court that C4C is irrational.
> My tax money is being given to other people without my consent.
Congress can tax and spend for the general welfare. Roads. Education. Small business loans. You consent by living in this country.
> Perfectly servicable/usable vehicles and engines are being wastefully destroyed.
Presuming a priori that these vehicles are usable, it isn’t wasteful if the net benefit is more than the worth of the vehicles.
> Many of the people benefitting from this deal are those exact same people who can’t afford a new car.
Hogwash. If you can’t afford a new car car without C4C, you can’t with it. After the dealer price increases, the loss of trade-in value, and the lesser discounts for certain vehicles, the difference probably averages ~$1.5K. That’s around 6% of the average new vehicle cost. Those using C4C are necessarily those that could already afford not to use it. I don’t know what “many” is supposed to mean, but it’s probably far fewer than you think.
> I wonder how many of the C4C beneficiaries also qualified for mortgages they never should have been approved for…
Is this a line from Hannity? How do you come up with a link like that?
> Will my tax dollars again be raided (or will my taxes be raised) to make those payments
You’re asking if the government will have a “we pay your car payment” program? No. No it won’t.
@ merlynbrit
>Let people learn the harsh reality of “it seemed a good idea at the time.”
Those who would be forced to learn would be least able to accommodate the strain. If the economists advising Congress thought that the failure of these industries would only affect the industries themselves, we’d never have had bailouts. The problem is that the downstream effects on unrelated parties can be, and often are, far more severe. We’re all in this game together, as unpalatable as it may seem.
The real threat of “spend our way to prosperity” programs like C4C is that they are addictive. Benefits are individual and substantial, while costs are born by millions (roughly half the population) and sting only a little. Moreover, C4C is “successful” in the way free candy is always popular. So it is extremely likely that C4C and variants thereof will become unkillable and morph into other subsidizing ever more kinds of consumption.
@knightRT
I understand what you’re saying, and I agree with you. The bone of contention is that C4C only benefits a certain few within one specific sector of the ailing economy.
It would be far more effecacious to give a $4500 gift card to each taxpayer. Goods would be purchased, services rendered, debt paid down…
If the government wants a reduction in ineffecient vehicles, then mandate that the automakers can’t sell them. Attrition will remove the Expeditions and Suburbans as soon as costly repairs start mounting. And all without someone else’s hand in my wallet.
It would be far more effecacious to give a $4500 gift card to each taxpayer. Goods would be purchased, services rendered, debt paid down…
That’s part of the point. This is supposed to stimulate consumption, not debt reduction. Having the government give consumers a voucher to pay off debt is like transfering money to bondholders. It goes nowhere in the economy and stops the multiplier dead. The purpose of this is to stimulate consumption, which creates growth in ways that debt repayments do not.
If the government wants a reduction in ineffecient vehicles, then mandate that the automakers can’t sell them.
That isn’t the main goal, despite the window dressing. This is a consumption stimulus package.
The government’s objective is to turn its $4500 rebate into another $10-20,000 or more of personal consumption. A car is the second most expensive thing that most people will ever buy, so it’s a fairly efficient way to generate a lot of spending quickly with just a little bit of effort.
Channeling that spending into a costly item makes it fairly easy to forecast the minimum level of consumption that will come from the program. What isn’t so clear and subject to debate is how many cars would have been sold anyway had there been no rebate.
agenthex: Context is important. He wasn’t talking about “struggling families” via comparison to other families who aren’t struggling, he was comparing families (ie the little people) in general to corporate wealth (eg. AIG bonuses).
Sorry, but that is quite a stretch. By that standard, virtually everyone with smaller cash reserves than a multi-millionaire is struggling.
The simple fact is that struggling familes – as most people understand the term – shouldn’t be spending their precious resources on a brand-new car, unless the government is virtually giving it to them.
Perhaps the blogger should write more carefully and stick to the facts, instead of using hyperbole and looking foolish.
agenthex: The main goal of economic stimulus is pretty clear, and consistent with similar programs already in effect internationally.
That doesn’t answer the question of whether it was successful or not.
agenthex: A large number of posts above discuss this, so I’m not sure why there needs to be any more confusion. In general, repeating the same winger talking points is only effective if other don’t catch on.
I don’t see any of those posts listing new vehicle sales figures for October, November and December of 2009, so they have no idea whether this program really boosted demand or merely moved ahead sales that would have happened anyway.
I don’t know this; you don’t know this; neither does the blogger – unless you have been consulting with Dionne Warwick. If so, please share her predictions with us.
The simple fact is that struggling familes – as most people understand the term
It’s pretty obvious the usage is what’s called “figurative”. If you don’t like figurative language, that’s fine, but you should be consistent and bitch to robert farago about it in all the ttac writing.
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That doesn’t answer the question of whether it was successful or not.
No, but it does answer the question of what the main purpose of the program is about which several people were having trouble with.
This means it can be properly evaluated on its main purpose and not other peripheral goals.
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I don’t see any of those posts listing new vehicle sales figures for October, November and December of 2009, so they have no idea whether this program really boosted demand or merely moved ahead sales that would have happened anyway.
We know that it has increase sales significantly for now. That is its main purpose. Even in the “worse” case, where it moved sales forward, it has already served its purpose of leveling out too many peaks and valleys. In the likely event we get better results than the “worse” case, well that’s just an excellent bonus, isn’t it?