Cash for Clunkers still pathetic
The Cash for Clunkers bill is proceeding rapidly now, having just been passed by the House. Americans who can afford a new car will get a hand up with a $4,500 check from your government.
What exactly is the point of this bill? To make car dealers more profitable? To help Toyota in its time of need?
The timing is just wrong for General Motors, which, being bankrupt, is very likely to lose lots of sales. It’s not great for Chrysler, either. Ford should be happy since their “we’re not bankrupt” campaign has been so successful, but I don’t think anyone is foolish enough to think the domestics will get the lion’s share here. If the Southern representatives honestly thought the domestics would get anything but a token boost, they’d unanimously and publicly be lambasting it; their concern, which they made clear during the past year, is the health of foreign automakers.
The basic excuses for this poorly written bill are to help our domestic economy and reduce our usage of gasoline. It fails on both counts.
With regard to the domestic economy – We are probably the only nation on Earth which provides no incentive to buy our domestic products. There’s no differentiation between domestic and foreign cars – though our tax dollars are going to the program. With two out of three domestic automakers wounded at the moment, and neither one having a reputation for high gas mileage (though Chrysler has the best-mileage minivan and competitive trucks and SUVs), the sales are going to be tilted heavily in favor of Toyota and Honda. That wouldn’t be so bad if Japan was helping pay for it, but Japan isn’t. It’s coming out of our pockets – and going into theirs.
With regard to cutting our oil dependence, 22 miles per gallon (especially if they’re using the CAFE numbers, which are hopelessly optimistic for average drivers) is hardly excellent mileage for a car. (It is admirable for a minivan and excellent for a full sized pickup.)
Third, how will this stop people from buying a dead SUV for $500 in order to trade it for a $4,500 voucher?
Isn’t it punishing those who sacrificed to get a higher mileage vehicle in the first place? The people who wanted America to have reduced oil reliance, and who got a thrifty Cobalt XHF or even a Caliber, are being punished, in effect. The $4,500 is for the guys who bought an F-150 to commute from Brooklyn to Queens, the ones who couldn’t resist a 300C.
The message this sends is, if you waste as much as you can now, the government will reward you later.
I could go on with regard to free market, use of tax dollars, blah, blah, blah, but I’m sticking to the practical aspects. If we’re going to do this, we should do it right.
The longer I look at this law, the more foolish it seems. Call your representatives today and tell them just how foolish you think it is. Remember, that $4,500 is a gift from you, the taxpayer, to you, the taxpayer. Along the way, there will be hundreds of dollars in administrative costs and thousands of dollars in interest payments. Even from the viewpoint of pure economic self-interest, this law makes no sense.
If I understand the bill, you must have owned and insureed the vehicle for one year, so your third point will not apply. My lease is up on my Durango in January, and I was going to reduce my vehicles by trading or selling my 95 Ram 1500 Club Cab 4 x 4. It only has 50,000 miles, but the winters have not been kind. According to KBB, the priviate sale price is around $4,000 in fair condition (not sure what it will be worth in January). I am torn, I do not want it crushed, but I also do not want to throw money away. I to am not a fan of this bill, so again I am torn.
Those are nice trucks. I always liked the first generation Ram x500 better than the second – actually I like the look better than the current models. If you can reduce your vehicles, your insurance savings will be pretty big, if your rates are like mine (due to where I live).
Thank you. That is one of the reasons why I am reducing the number of vehicles. My almost 17 year old daughter will be getting her license soon, so I can just imagine the insurance bill. I will miss the Durango, poor gas mileage and all. When it would snow my wife always wanted to take the “Tank” as one of her co-workers who would ask for a ride called the Durango.
We have reasonably economic automobiles. A 5-speed PT Cruiser – my daily driver – and a 2004 Dodge Caravan. Both are paid for. There is no reason to by another at this time. This money is going to those who can most afford these cars anyway. It’s not like anyone sane is itching to plop down the money on a new car in the current economy that lives in the middle class like I do. What a waste!
Congress has no clue. These clods are in the twilight zone. No doubt Obama will sign the bill just to keep the left side of the aisle happy. It’s their bill. It’s worthless and expensive in a time we can not afford it.
While getting old, thirsty, polluting gas guzzlers off the road is an admirable thing to do, I agree that this will only hurt the Big 3 further. The Japanese and Korean manufacturers will benefit most…and I’ll throw the Mini in there, too, even though they already are at maximum capacity, selling nearly every unit they can produce.
It would be nice to protect the taxpayers’ “investment” in Chrysler and GM (not to mention helping Ford) by having the program only apply to the purchase of one of their fuel efficient vehicles. Can you imagine the cry from foreign countries accusing us of protectionism? Threats of trade retaliation wouldn’t be far behind. Why does it seem that the U.S. can have it stuck to them on some many levels when it comes to trade, currency manipulation, etc.? If we just say “Buy American” other countries have conniption. Just ask Obama. He got grief for saying just that. the knee-jerk reactions from other nations was ridiculous.
Personally, I think it’s high time Americans start taking care of our own. I can remember when places like Wal-Mart took pride in selling products made here. That’s all history now. Americans consumers don’t seem to care about anything but price, not country of origin. Based on the state of our country, I think it’s time we restored some national pride.
No other country is going to come to our aid economically or militarily. If we want to maintain a leadership position in this world we better learn we have to take care of ourselves. That means keeping the corporations that provide jobs and opportunities viable. I just don’t see transplants like Toyota, Honda, Kia, Hyundai, Subaru, Nissan, Mitsubishi, BMW, and Merecedes offering up their U.S. manufacturing facilities to build weapons when WWIII arrives, and it eventually will. Beyond those considerations, our ability to help less fortunate countries is being greatly diminished by our economic implosion. That certainly has far reaching implications about stability around the globe. As we become weaker, that will just embolden our enemies and others that seek to exploit us and others that can’t defend themselves. Something to think about the next time you go shopping. You know what irks me? Seeing a bumper sticker telling me to “Buy From Local Farmers” on the back of some foreign POS. How hypocritical can you get?
While I agree that Cash for Clunkers is a bad idea, it’s not quite a gift from you the taxpayer to you the taxpayer, it’s money taken from the upper 30 percent of the tapayers, and given to the other 70, minus administrative overhead, etc as was already mentioned. Mr. Obama said it quite accurately when he told Joe the Plumber he wanted to redistribute the wealth. Cash for Clunkers is simply another redistribution vehicle (pun intended).
Sortakinda but not really. The upper 30% are more likely to benefit as they have the money to buy new cars anyway. The lower 70%, if you include payroll taxes, pay roughly the same percentage of their income as the upper 30%. And I see no reason not to include payroll taxes. Social Security, for example, stops long before you reach $100,000 per year in income, and is quite a stiff tax (though it comes with good benefits) if you include both employer and employee sides – as I do, being a self-employed small business owner.
As for redistribution of wealth, I consider that term nonsense. Everything government does is redistribution of wealth. Even a minimal government that just taxed with a flat tax and maintained a standing military would be redistributing wealth from the civvies to the military.
The “Cash for Clunkers” program has a billion dollar price tag. What a waste. A billion dollars spent on public transit would go much further in energy savings. Public transit accounts for around 3% of all the trips taken in the USA. (That figure includes cargo delivery by trucks also.) If that percentage of trips taken could be raised to 10%, it would reduce this nation’s transportation energy use by 40%. Transit improvements don’t have to be expensive. I’m not talking about monorails and maglevs. The simplest improvements such as timed transfers, bus shoulders, and more frequency offer good success for the dollars spent.
There are other things we can do in America such as the plug in diesel proposal. All that involves is providing electric outlets for diesel trucks when they park overnight. That will allow them to shut their engines off in cold weather and not idle all night. This doesn’t sound like a big deal but it offers a significant energy savings.
There has never, ever in this country been a real attempt at usable, reliable and efficient public transportation. My father remembered the tire companies killing the trollies in Baltimore through political graft in the late fifties. The politicians have either ignored or pilfered funds that would be used for it in the northeast areas other than NYC. The folks that ride public transport are treated as untouchables by the press and the driving public. We have needed reliable and efficient public transportation that wasn’t gross and disgusting for as long as I can remember but in the current political environment it will never happen.
I would be glad to use it if it didn’t cost more and take 2 1/2 hours to get to where it takes 40 minutes to drive. That is not an unusual figure in the Baltimore/Washington D.C. metropolitan area. That’s pretty typical. I remember my supervisor who had car problems being stuck on the buss for three or more hours to get home to Laurel, MD from Reston, VA. Obama doesn’t look like he’s interested in changing this, either. He wants us to buy more cars…
To be fair to Obama, much as I disagree with this particular crazy bill, I think he realizes that the sudden loss of car sales has been disastrous for our economy, and would be more so if he wasn’t printing dollars like mad to create a softer landing.
(As for printing dollars, I used to think Bush was mad for his “run the presses” policy, but now I’m not so sure. Bush and Obama both might have been trying to counter the effect of the Chinese government’s purchases of the dollar – as well as the inevitable effects of the dollar being the “currency of choice” for world investors. A strong dollar means more consumerism but also destroys the basis for our economy, that is, making stuff — whether it’s intellectual capital, food, or just plain stuff. Watering down the dollar by printing a few extra trillions might be a way to counter Chinese currency manipulation AND the dollar’s artificial strengthening by investors. Of course, the problem is that it’s not like liquid titration or working a balance-beam scale; things have a tendency to go squirrely awfully fast, and you can’t just zip a weight over or drop another bit of alkaline to make it better.)
This is all familiar with the Bush Administration. Follow what Germany did after WWI.
The republican South, has what auto manufactures located in their states? Foreign. While they talk about being American, they din’t care so long as they get their cut first. Just as they oppose the Government Health Care program. Its better that we all die without insurance, then providing insurance to those who cannot afford it now. So while they talk about providing quality care, I’m not sure how that translates to the 40 mil that don’t have it. I mean that is quality care isn’t it? What about those who have it and insurance doesn’t cover it, they loose everything. I’m sure that is not the program they want. They want to insure that every American has the best Health Care in the World. And so long as You Pay for It you will get it.
The clunker bill can help. Each individual has to make the choice to spend the money on an American vehicle. I have a 89 Dynasty that might get traded off on a new Chrysler minivan possibly. Not sure yet. We still cannot afford the payments yet. Of course if the Clunker Bill passes, I can’t afford to buy a $500 mini-van for $4500 either. They are squeezing both ends of the spectrum.
Its screwed up. We can’t protect our jobs, because our CEO’s are outsourcing everything as fast as they can. We can’t buy American because its protectionism, and we Can’t sell in other countries because our currency is too high, and we have to protect their local economy. Everyone jumps on the band wagon to go overseas, England did this after WWII. Europe socialized medicine, and increased taxes. The U.S. Republicans won’t increase taxes to pay for anything, but will give it away to overseas interest, which are our own corporations ie. China. The Republicans are trying to pass laws to allow Chinese goods into the country with no tax. Let the economy collapse, it will be like Germany after WWI. We will each be making 1 Trillion an hour to buy 2 Trillion dollar bread. That will wipe out our debt, lead to a complete collapse of the global economy and probably start several wars.
All I honestly care about is that the clunker bill is likely to help the wrong folks at a time we can afford it the least.
I’d love to see a health care bill as it would put the UAW workers on an even playing field with the CAW and workers in the EU. Think about that for a moment: Costs to the manufacturers that is not driven by the current corrupt insurance industry. If we can get wall street to behave and the banks stable in our lifetimes the auto industry in the US doesn’t have to die after all.
It’s not like Obama hasn’t been trying to get a health care bill like that, but the opposition has been throwing crazy scheme after crazy scheme out to deflect it.
This is a dumb idea. Certainly it annoys the hell out of us who truly love old cars. It could result in plenty of perfectly serviceable used cars being junked instead of serving other owners
But the problem is deeper. It basically destroys the cheap used car market that many poorer people depend on (the 1000-2000 range) and makes 4000 the minimum price of entry for ANY car. It doesn’t necessarily help people with older cars either because a 4k credit is not going to put many of them in a position to buy a new car (especially getting more expensive because of more government regulations). It just means more people are being encouraged to go thousands of dollars into debt, when perhaps many of them really shouldn’t (sound familiar??)
The entire used car market could be distorted upward because of this. If you want a used car you’re going to have to pay more to outspend the government who is bidding against you.
I agree Jay. That is exactly what I’m afraid of. We just bought a 1998 Dodge Ram 1500, for $2500. We can’t afford with gas going up in the future to buy one for $4000+ dollars. While that 1500 may not be much for some, it all adds up.
This bill will also deprive us of cheap used parts as these vehicles that are traded in are required to be destroyed. I feel that being able to reuse parts is a great form of recyling and benefits us by providing less expensive replacement parts or parts that are not available elsewhere. It will also deprive us of cars to restore in the future, it is just bad legislation.
The rules of the program:
1. The car being replace has to be crushed.
2. The car being replaced must get 18 MPG or less.
3. The help the government allows is dependent on the difference between the old car’s mileage and that of the new one.
Are these guys the same ones we remember from school who always complained that the dog ate their homework when they didn’t have it or what?