Cash for Clunkers
Cash for clunkers is a plan by Congress to give you 3500 - 4500 dollars in hopes that you will make a bad decision with your money to help out the Detroit automakers.
This table from USAToday.com gives a good summary of the program.
So, if you have a large truck that gets 13 miles to the gallon and you trade it in for one that gets 15, the government will give you 4500 to destroy it. Tell me again what this accomplishes? Let’s see, it puts more Americans further in debt by enticing them to pay more than they can afford for a new car. I can’t remember, was it this crisis that started by people buying things they couldn’t afford with money they didn’t have with help from the government? Oh yeah, and that car will devalue by more than the 4500 they get from the government the moment they drive it off the lot. And by government I mean you and me, the American taxpayer. This does not help the consumer, it is just a round-about way of writing a 3.5 to 4.5 billion dollar check to the car makers. (There is a limit of 1 million vouchers.)
We are once again messing with the free-market, and that always works out so well for us. Currently, the idea is hurting sales because people are waiting to see if they can get free money from the government. So, people who were already planning on buying a new car are going to now get 4500 off because the government wants to help sales. Great idea. I’m sure nobody will try to take advantage of Universal Health Care either. Right.
Millions and millions of people drive cars to work every day. Few people have to opportunity to be without a vehicle. If these companies can’t find a way to make money in this environment, they really deserve to fail. We have already given them billions and billions of dollars, why do we need to continue to give them money? What makes them so special. I’m sure my company could sell more software if the government gave everyone $4500 to buy it. Why aren’t they doing that? I guess it is because we aren’t “too big to fail” yet. Maybe someday we will get billions of dollars because we are too big to fail. Of course, by that time billions of dollars is what it will take to buy a loaf of bread due to the currency being worthless. Cash for clunkers is yet another poorly thought out bill by our Congress.