If you know what the program is, skip this paragraph.
For those of you not familiar with the new government program, Cash for Clunkers, it is a program allowing people to trade in their used vehicles that have under something like 25 m/gal and receive $3,500-$4,500 toward their new fuel efficient cars. Sounds great right?
No. This program is not great.
The cars traded in to the program were basically destroyed.
The old cars are crushed. If not, a compound was put into the engine to make it stop working. People that usually get to buy car parts, cant. If they are allowed to take any parts, they are only available to be sold for 6 months.
What about people who need auto parts?
what about the people that need to buy cheap used cars? The supply of these cars has greatly been decreased and will continue to be decreased if more funding is given to this program and it is restarted. 250,000 working cars are being destroyed.
This also decreases the demand in 2 or 3 years when the people that naturally would have sold or gotten rid of these cars are all doing it now, instead of later, further fucking up the market in the future.
Government trying to fix markets only creates more problems. Look at FDR in the Depression when he tried to raise prices by destroying prices of crops and other commodities. He killed 6 million pigs because pork prices were too low. This was during the great depression.
The Budgeted what was supposed to last for 4 months....and it lasted 4 days. (These are the same people that are saying that 1.5 trillion dollars is enough for health care). Its obvious they did not account for such a large increase in demand. But seriously, they http://newschoolers.com/web/forums/createthread/cat_id/2/are
giving away free money, what did they expect. My guess is that they wont expect the increase in demand on the government health care system when so many people are brought into that market, and so many people switch from private insurance (around 83 million will), while the supply of doctors will stay the same, but likely decrease.
Edward Markey, the author of the program said it was the most successful stimulus program of 2009.
Horray Markey. You gave away free money faster than you thought!!!!
Dealerships short term business plans are fucked. All of those ads you see and everything they have done to use this program are done. In 4 days the program is done, destroying the dealers short term plans.
You say this sort of thing works in Germany. This program is pretty much permanent there.
LISTEN TO THIS. do not try this. dont. If you have to, look for a vid on youtube or something.
If you go to cars.gov (the site for cash for clunkers) and try to submit your car, and once you agree to the terms, a warning box comes up saying:
"This application provides access to the DOT CARS system. When logged onto the CARS system, your computer is considered a Federal computer system and is the property of the US Government. Any or all uses of this system and all files on this system may be intercepted, monitored, recorded, copied, audited, inspected, and disclosed to authorized CARS, DOT, and law enforcement personnel, as well as authorized officials of other agencies, both domestic and foreign."
Did you read that!!!!????
It is legal for them to do everything up there. They can retrieve all of your information while you are logged on, possibly even after. Dont try to go to the website. If you dont believe me, then research other places, or just dont beleive me. theres a reason I was vague about how to get to it.
There are too many regulations and too much bureaucracy with this. The EPA keeps changing the gas mileage that qualifies you from getting the money.
There is a statement in the contracts that says that if the government cant pay the $4000 or so, then you do. I think this is just to cover their asses, and not much will cover it. They said they would honor any deals that were in progress. They have already spent $150 billion. and they have $800-850 billion in obligations already.
If you learn one thing about this, it is that it was essentially a tax cut. Not a tax cut for all, just for the people who happened to have qualified. But what it shows is the amount of spending and demand that it created. Look at how busy car dealerships were. Imagine if the stimulus plan had just been tax cuts. The same price of the stimulus plan would have equaled a six month complete tax holiday. You could engineer it different than that, but think of the spending it created, and think about the spending that would be created by putting money into the pockets of americans, instead of pork spent by the government to spend in districts to get reelected in 2010.
The government got into a simple thing: Auto trade ins. This is something that has been done for many many years. This is something that used car dealers do everyday and make a profit. They budgeted this 1 billion or so to last for 4 months and it lasted 4 days. These are the same people estimating the costs for government run healthcare. If they cant operate an auto trade in, a small 1 billion dollar program(small for the government) how can they run healthcare?