Senate Expected To Vote For "Cash For Clunkers"

According to Reuters, "Senate Majority Leader Harry Reid announced an agreement with Republicans to vote on Thursday on the popular 'cash for clunkers' auto sales incentive bill." The program, funded with $1 billion to offer people $3,500-4,500 to trade in gas guzzlers and buy more efficient vehicles, ran out of money in days (and spurred auto sales), prompting the government to put together another infusion. However, in some areas, clunkers are all people can afford: A Bronx car dealer told NY1, "People do come and say, 'I got $2,000 and what can you do for me? What car do you have in that range?" while the recent purchaser of a used SUV explained, "It was more convenient for me and it fit into my budget. I can't afford a new car. I can't. Not in this economy. I can't."

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By Jen Chung in News on August 6, 2009 11:48 AM

Comments [rss]

inoyourider

The boost in auto sales is artificial and government induced.

I don't think that with the life span of vehicles today, there is enough market for a massive company like GM. They need to pare down the fleet and focus on building smaller quantities of better cars and reverse the downward trend of demand that has coincided with an upward supply slope.

SeasTooFarToReach

I read a report that said that by the time WE all pay for this, it would had cost us over double the money. It doesn't make sense. There are bigger problems out there.

ides_of_march

Why not just wave all governmental sales taxes on fuel efficient cars instead? Oh wait, then the government does get to play socialist Santa Clause. Nevermind.

drewo

The government should realize that when you let people have more money (either lower/eliminate taxes, or provide incentives like this) folks will go out and spend the money - stimulating the economy like the government hopes to see. So yes, waive taxes on any number of items - clothing, household appliances, autos, airline travel - and people will spend.

Of course, without the flow of taxes, a bunch of bureaucrats will be out of work. But that's not a bad thing.

silver

No, if people got extra cash they will spend it on hookers, blow, and lottery tickets (then again most lottery ticket $ goes back to the state general fund).

drewo

At least they are contributing to one portion of the (underground) economy.

blondeinthecity

but what if this subsidy means that not only are we putting more fuel efficient vehicles on the road, but we are making the streets safer by taking older vehicles off? I don't really want to pay for it either, but (in theory) it makes a serious difference.

only time will tell...

ides_of_march

The biggest clunkers are congress, not to mention the clunker-in-chief. This is just another gigantic, stupid waste of taxpayer money.

hotstepper

this program is total bs. why should taxpayers subsidize all those hosers that bought huge cars and SUVs when gas prices were low? they should pay the price for their conspicuous consumption each time they visit the pumps.

Qraymond

Sometimes what seems "fair" is not necessarily what will do the most benefit for the most people. Making people "pay the price" for previous bad decisions helps no one.

The program is extremely successful because it: 1) Increases the fuel-efficiency of our auto fleet and 2) encourages spending in an industry that is in serious trouble and employs a lot of people.

Seems like a solid example of an effective government program to me.

hotstepper

while i can appreciate your points, it is not up to the government to spur auto sales or update what is parked in our driveways. in a capitalist society, spurring auto sales is up to the companies that sell autos.

it boils down to the fact that americans need to reflect upon the government's role in our consumer-based economy, and as consumers we must understand the difference between "what we want" and "what we need."

Qraymond

What we "need" is a viable plan to reduce energy consumption and eliminate our reliance on foreign oil. This is a small but successful part of that plan.