Quod scripsi, scripsi
There was a big spike at the program's onset, but that will settle down. I don't think the market can sustain the increase in sales at this point in timeProblem is, it's one week's worth of sales. $2 Billion more in the program is one month's worth of sales at best. That's it.
Is there really a difference if those who would have bought a car soon anyway buy one now? If there is, why is buying now worse?Then those customers are effectively removed from the new car market for the next three to five years.
IMO this is one of the few stimulus programs that actually does represent a stimulus. It's basically a tax break for people who trade in inefficient cars, except that increases the national debt instead of the federal deficit. A tax break would have been better, but the democrats are in control, so what are you gonna do? Just like an analogous tax break, this won't discourage any sales, but should encourage some new sales. If this were a tax break instead of a voucher, would you be in favor of the program?That's the problem with this sort of program--it's not stimulating anything, it's merely pulling tomorrow's sales forward to today. Aggregate sales over time are not increased--which would be the result of true stimulative effect. Today's bump in car sales will be tomorrow's slump in car sales.
CARS is the crack cocaine of stimulus. Big high, deep crash, lots of damage left behind.
I don't think the Cash-for-Clunkers program is a bad program. I think it's a good idea. Maybe it needs to be reworked alittle, but from what I know of it, it's doing what it's suppose to do - get older cars w/low or poor gas milage off the roads and get consumers into newer cars w/better gas milage.
As I understand it, the underlying primus behind the program is to put fuel efficient cars on the roads. I'm all for that because the more fuel efficient vehicle are being driven the less this country's dependency on foreign oil. Such vehicles will also stretch our domestic oil supplies and that's a good thing. The other thing this program is suppose to do - again, this is my understanding of it - is that it gets people buying cars again even if they're purchased at a "discount". I'd rather those cars be all American and mostly GM cars since the auto maker needs all the help it can get since they just came out of banruptcy, but as long as the main two objects of the program are being met I think I can handle that.
Now, the opposition would say it's a bad program because it uses tax dollars which is true. But if the car notes are 4-6 years in duration and most of the cars being sold turn out to be American cars, then it can only go well for the American auto makers because their stock value is likely to go up. And even a small surge in value could bring a good rate of return in earnings. Regardless, the positives here are old cars with poor gas mileage coming off the road, stock prices hopefully improve and consumer spending returns. Would I change a few things about the program? Sure. Absolutely! But on the surface, it's one way that works (according to our European posters who have seen the program in acton) to get people buying cars again.
That's a fair question...anyone in opposition of the program care to answer?If this were a tax break instead of a voucher, would you be in favor of the program?
Last edited by Objective Voice; 08-04-09 at 08:43 PM.
The Democtrats usually take care of that themselves, as proven by the trouble their 'good idea' legislation has getting through Congress.The Republican party is VERY concerned that Americans not think of Democrats as a party that has good ideas.
No... the GOP is against it because its a bad idea.That is why they are against legislation that would seem to be a slam-dunk, win-win deal, like Cash for Clunkers.
Never mind that the DEMOCRATS, not the GOP, is holding this up.
I don't know what the uproar is all about. If you put brakes on clunkers, then the clunkers become safer, don't they? After all, you don't want clunkers careening down our highways with no brakes, do you?
And the Senate doing all that brake work has to be pretty entertaining too. Can you imagine Harry Reid with a monkey wrench in his hand? Oops, bad imagery. Reid has been throwing monkey wrenches into government machinery for years now.
The ghost of Jack Kevorkian for President's Physician: 2016
this thread really wasn't about whether clunkers is a good idea or bad, it was more concerned with the stupid POLITICS underlying it
but since the issue has been raised, and it's a fair question
The prudent Prof opposes this corpus juris
1. most of the cars purchased---for the express purpose of pumping up the US economy---are foreign brands
2. it demands the destruction of millions of dollars of assett, used cars that could help thousands of americans get to work or shuttle about their families, it looks to skew screwy the pre-owned car market, it appears to be a drag on auto mechanics, etc
3. in the name of environmentalism it looks to scrap tons of landfill, it pours liquid glass into engines, rendering worthless the most recyclable parts of discarded cars, wreckers don't want em, for instance...
4. as law, it's typically clumsy and ad hoc in its conception and execution, like keystone kops
5. also interesting to me is the preference of consumers, when it comes to the few american cars they ARE buying, for ford over govt motors, as the latter is apparently perceived as insolvent in the long run