ShopTRD.com Blog: Cash for Clunkers Cools It

The "Cash for Clunkers" program - also known as the "Car Allowance Rebate System" that wasn't really a rebate at all, by definition ("a return of part of the original payment of some service or merchandise; partial refund") - has finally come to a close. Lots of positive things came out of the program including getting many older vehicles, that polluted more than the new fuel efficient vehicles, off the road. Of course, if you had a vehicle that really poluted (i.e. manufactured before 1984), you were pretty well out of luck, as SEMA's lobbying saw to that. The money helped increase new car sales to their highest level in quite some time. But what did this cost? The simplest answer is just a number that means very little to the people spending it. $3,000,000,000, that is three-billion-dollars. This means that every man, woman, & child in the United States just paid roughly $10/ea. After all the bureaucracy it took to to get the program passed and administration of the program, etc. I would say we may, in fact, be looking at around $25/ea after everyone gets paid.

$25 (or $10 if you don't want to include the admin)/ea doesn't seem like a lot of money until you start to realize how it gets paid and who is paying it. There is a great deal of people who do not pay taxes, meaning the burden of the bill is shifted to a smaller group. Best I can tell, only about half of the people in the US actually even file income tax and of those roughly 1/3rd do not pay anything. This means that we are quickly closing in on each tax payer owing $100 for the cash for clunker program by the time you consider interest paid on the loan, etc. If all I had to do was pay $100 to cure the economy, I admit it would be tempting. Reality, though, is the program only helped the car industry (mostly imports over domestics) temporarily with no guarantee of future gains. In other words, on relatively small program (when compared to things such as the mult-TRILLION dollar "bailout") bills us out at $100 and does nothing. If you are a gambler, perhaps you are used to the odds being against you and throwing away $100, but I, for one, do not care to frivolously blow what little money I have on stupidity.

I am in the automotive industry (evident from this blog), but even I do not see the wisdom of this one. I just hope they cut their losses and move on rather than continuing to dig the hard working American people into a massive hole that will not be cured short of revolution or something equally massive.

Just one crazy guy's thoughts.

________________________
Jeff Rance, II
Online Part Sales Manager

Direct: 972.792.4823
E-mail: Parts at ShopTRD.com

|JT2Auto.com|ShopTRD.com|USAToyotaParts.com|