Cash for Clunkers

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avak
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Cash for Clunkers

Postby avak » Wed Aug 26, 2009 6:34 pm

Do you guys consider it a success or not?
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Re: Cash for Clunkers

Postby kiryan » Wed Aug 26, 2009 9:47 pm

Very successful at clearing out the backlog of inventory. Very successful at improving fuel economy. Average of 9.1 miles per gallon I think. Also has the added benefit of increasing the chance of a successful union bailout (automaker bailout).

Program seems to be efficient in execution so far. If they pay out 50% of the money over the next 30 days I'll say it has been well executed.

I worry about them restarting production though... I think its possible Americans will spend the next 5 years paying down their debt and living within their means... which is not going to support a new car every 4.5 years like we are used to. I also worry that they front loaded demand... and that we are going to go through 6 months of really crappy auto sales because people who were thinking about buying a new car over the next year bought last month. I also worry about the discount mentality... I'm guessing car prices will go up and manufacturer rebates will get bigger over the next 12 months to entice buyers.

I also wish we could've waited until the really fuel efficient cars hit the market in the next year or two. I thought seriously about trading my Jeep in (Chrysler was giving basically 9,000 off a new car), but I decided to not incur additional debt and to wait for things like the Volt at supposedly 250 mpg?


and lastly, I worry about the interest on the 3 billion we just borrowed to help a bunch of lower middle class people buy new cars for no real reason other than to keep the system going. Mugabe gave doctors and healthcare professionals cars last year to try and buy their support despite the fact that his country is completely bankrupt. Its not the same, but it looks the same.
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Re: Cash for Clunkers

Postby Corth » Thu Aug 27, 2009 3:20 am

If your measure of success is whether or not it was popular and utilized, it was an outstanding success. A lot of people took advantage of the free government money being thrown around.

If you measure success on the basis of its environmental impact, it probably was a moderate success. People purchased more fuel efficient vehicles then they might otherwise have purchased.

As some sort of stimulus program, it was idiotic.

First and foremost, you destroyed over 700,000 perfectly good vehicles. There are people walking to work, taking several busses to work, etc., throughout the country who would certainly like to have a vehicle - but instead they were destroyed. The idea that we can somehow destroy valuable goods to stimulate the economy.. wow.

Second, it did not increase or decrease demand for new vehicles. Rather, it mostly pushed demand forward. People that were likely to buy a new car in the next year or two purchased one now. There was a negligible amount of additional demand for new cars in the aggregate.

Third, it added 3 billion dollars to the debt of this country.

Fourth, the winners of cash for clunkers were people who traded in clunkers, and automobile manufacturers. The korean and japanese manufacturers took the lion's share of the money. Not the domestic US manufacturers. However, the US taxpayers are on the hook for that money.

Fifth, you created an incentive for americans to take on even more personal debt financing new cars.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth

Goddamned slippery mage.
Sarvis
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Re: Cash for Clunkers

Postby Sarvis » Thu Aug 27, 2009 3:42 am

Corth wrote: The korean and japanese manufacturers took the lion's share of the money. Not the domestic US manufacturers.


Which means most of the new cars were probably built in America and creating jobs here.

I'm going to count that as a pro. :P
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Kifle
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Re: Cash for Clunkers

Postby Kifle » Thu Aug 27, 2009 11:09 am

Sarvis wrote:
Corth wrote: The korean and japanese manufacturers took the lion's share of the money. Not the domestic US manufacturers.


Which means most of the new cars were probably built in America and creating jobs here.

I'm going to count that as a pro. :P


Lol, I see what you did there.
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Corth
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Re: Cash for Clunkers

Postby Corth » Thu Aug 27, 2009 11:30 am

Fair enough. The foreign manufacturers certainly create a lot of jobs here. Hell, I create a few jobs here myself - perhaps I should get government money too. Is that the basis for giving out government money now? All I know is that the federal government didn't bail out plenty of foreign automakers that have gone bust - but they did bail out GM and Chrysler - and then spent 3 billion on a program that in large part benefitted GM and Chrysler's competitors.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



Goddamned slippery mage.
Corth
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Re: Cash for Clunkers

Postby Corth » Thu Aug 27, 2009 11:35 am

I forgot to add one additional 'con' to cash for clunkers. It rewarded people who purchased gas guzzling vehicles - at the expense of taxpayers who purchased fuel efficient vehicles. For instance - I have an old 1999 Honda Civic with about 100k miles on it. One of the reasons I purchased it new in 1999 was it's fuel efficiency. Was I rewarded for that? No - my 1999 civic is too fuel efficient to be considered a clunker. Actually I was penalized. I will have to pay higher taxes over the years to pay back the debt the government took on in order to reward my fellow citizens who were NOT responsible, but rather purchased a gas guzzler instead.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



Goddamned slippery mage.
kiryan
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Re: Cash for Clunkers

Postby kiryan » Thu Aug 27, 2009 1:32 pm

A funny idea from Teflor... bumper stickers that say "I paid for part of your hybrid" (back under the credit for buying hybrids program)

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