House Pumps $2 Billion More in Borrowed Money Into Cash for Clunkers
Nice.
The House has voted to rush an additional $2 billion into the popular but financially strapped “cash for clunkers” car purchase program.
The bill was approved on a vote of 316-109. House members acted within hours of learning from Transportation Secretary Ray LaHood that the program was running out of money.
Let me see if I have this right…
The government passed a program and expected the money to last until October. It ran out of money within days, so they tripled its budget with more borrowed money. Is that about right? What does this tell us?
- Government is woefully bad at estimating the actual cost of things.
- Government is equally poor at predicting the consequences of what they pass.
- Government has botched the implementation of this program by changing the rules in the middle of the implementation period.
- If a government program is proving popular, they will immediately throw more money at it without even considering any of the above lessons.
- This same government wants to control much more of our lives.
Prediction: This program is creating an artificial demand in the automobile market, but it is not fundamentally changing the market. As soon as the government stops pumping money into this program, demand will not only return to its previous levels, it will slump lower since some of the pent up demand has been alleviated.
And these are the same fools that want to run health care. If that doesn’t scare the crap out of you, you are either brain dead or a Kool Aide drinker that will follow Obama off the cliff like a lemming.
Posted by .(JavaScript must be enabled to view this email address) on July 31, 2009 at 1512 hrs
Ah, sure why not add another $2 billion to the all ready record setting deficit.
What’s a clunker is this idea.
Posted by .(JavaScript must be enabled to view this email address) on July 31, 2009 at 1546 hrs
Car sales do not move the economy; perhaps a little, but nothing like home sales. Cars are a liability and offer no equity or higher resale value.
This is $3 billion magic show….and your money goes **POOF!!**
Posted by .(JavaScript must be enabled to view this email address) on July 31, 2009 at 1556 hrs
Just wait until they’re voting on whether to spend more money on grandma’s hip replacement.
Posted by james wigderson on July 31, 2009 at 1557 hrs
What does the dealer have to do with the “clunker”? Must the car be destroyed or can the dealer simply re-sell it to someone else?
Posted by .(JavaScript must be enabled to view this email address) on July 31, 2009 at 1605 hrs
Destroyed.
Posted by Owen on July 31, 2009 at 1617 hrs
Yeah, when this was announced on the news last night I wanted to find a bullhorn and stand on my roof and say “And you people what this bunch running your healthcare!”
Economically, your assessment is dead on. There were probably people who weren’t buying a car because they were waiting for the program. So sales probably slowed in anticipation of this programs start. Then SUDDENLY demand surges, the system couldn’t handle the applications and they put a freeze on it. IMAGINE THAT. And once its over, NOTHING fundamentally has changed in the marketplace, we won’t be any better off, just some people got a give-away at taxpayer expense (someday) in the meantime, inflationary pressures of all this spending increase.
How about a REAL fundamental change in the marketplace. LESS SPENDING AND LOWER TAXES. TRUE change.
Posted by .(JavaScript must be enabled to view this email address) on July 31, 2009 at 1634 hrs
xxpilot….
You MUST stop making sense. Now please get back in the box where you belong
(sarc)
Posted by .(JavaScript must be enabled to view this email address) on July 31, 2009 at 1705 hrs
The rebate actually goes to the dealers. So how many people are being screwed out of some of the acutal rebate by games being played? In other words, I would bet that the amount a dealer would normally give up in negotiations is now in the rebate.
I saw a dealer with a sign outside “Official Cash for Clunkers Redemption Center”. You can see by the wording how much respect they have for the intelligence of their customers.
Posted by .(JavaScript must be enabled to view this email address) on July 31, 2009 at 1736 hrs
Good point.
They say a buyer could get $3500 to $4500. So, let’s assume the buyer doesn’t understand how the system works, and the dealer hands out $3500 to each buyer instead of the allotted $4500.
The buyer is happy because they just gained an extra three and a half G’s. But they could have got four, or more. The dealer is happy because he makes the sale and hangs onto an extra grand per buyer - $1000 the buyer never really missed.
Hmm…I think I’m going to buy a car dealership tomorrow.
Posted by .(JavaScript must be enabled to view this email address) on July 31, 2009 at 1745 hrs
The dealer has to credit on the invoice the correct amount they are approved for, whether that is $3500 or $4500. They can’t fake that paperwork or make up their own amount for the credit (well maybe they could, but they’d be engaging in defrauding the federal govt.)
Where this will screw the unknowing consumer is that the dealer will probably start negotiating at full list price and then some and then try to sell the car based on that price less the clunkers credit.
But, nothing wrong with free enterprise there. The program isn’t designed to maximize consumer savings or protect naive car buyers but rather get old cars off the road and juice up the sale of new cars for these dealers.
Posted by .(JavaScript must be enabled to view this email address) on July 31, 2009 at 1819 hrs
Well, there are always problems (seen or unseen) when the government starts to meddle in the free market…even if done for benevolent purposes.
If the free market were truly working, those dealerships would fail, which is required in a free market system. The problem, though, is that Democrats believe government can not only prevent failure, but create success.
That’s not the free market I remember.
Posted by .(JavaScript must be enabled to view this email address) on July 31, 2009 at 2205 hrs
If $1 billion lasted four days, how long will $2 billion last? [No using a calculator here ...]
Posted by Peter on July 31, 2009 at 2316 hrs
Want to really know about cash for clunkers…watch this:
(props to Glen Beck)
Posted by .(JavaScript must be enabled to view this email address) on August 01, 2009 at 0910 hrs
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