From the Wall Street Journal
Burton Abrams and George Parsons of the University of Delaware added up the total benefits from reduced gas consumption, environmental improvements and the benefit to car buyers and companies, minus the overall cost of cash for clunkers, and found a net cost of roughly $2,000 per vehicle. Rather than stimulating the economy, the program made the nation as a whole $1.4 billion poorer. . .
In the category of all-time dumb ideas, cash for clunkers rivals the New Deal brainstorm to slaughter pigs to raise pork prices. The people who really belong in the junk yard are the wizards in Washington who peddled this economic malarkey.
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That's what I didn't understand about the Cash for Clunkers program. It is a deflationary program. You actually have the government incentiveizing the mark-down in value of vehicles that would otherwise sell for more in the free market. On top of that, the parts in clunkers are destroyed, so they can't be salvaged and reused in other vehicles. It is the destruction of capital. Doesn't seem to make a lot sense.
ReplyDeleteCash for Clunkers easily takes the cake for dumbest federal program ever. Far from acting in responsible ways, the government oversaw the deliberate destruction of capital and wealth. Criminals, stealing the cars from the junkyards and selling them to less industrialized nations, are acting more philanthropically because they at the very bottom they are still using the old parts.
ReplyDeleteDidn't the lefts try to push this whole recycling thing on us awhile ago? Man, how things change..
I wrote a nice editorial on my blog on Cash for Clunkers, citing Chris Edwards from Cato, and providing general background info. Here it is, from August. http://redageflaw.blogspot.com/2009/08/cash-for-clunkers-to-refund-for.html
I saw this months in advance
Matt, post your links as a link so I can go right there and read your fine words. I am low tech, remember...
ReplyDeleteI don't know how to post it as a link.. is there some way to do that?
ReplyDeleteBut you can just copy/paste the URL into your address bar for now.