Reviewing the Cash for Clunkers Folly

Jeff Jacoby, a Boston Globe columnist, wrote a very interesting assessment of the Cash for Clunkers Program, or the Car Allowance Rebate System officially, in a column called 'Clunkers,' a classic government folly.  The Cash for Clunkers program was indeed a classic case of government simple-mindedness with consequent harm done to many Americans.

This Obama - Democrat program paid American consumers up to $4,500 for an old car that had low gas per mile ratings when they bought a new one with better gas mileage.  The "clunker" had to be in drivable condition and it was to be destroyed.  The engine was chemically destroyed and the car was  shredded or crushed.  This program cost taxpayers nearly $3 billion.

Let us examine the consequences of the Cash for Clunkers program:

• Because mostly just the timing of car sales were affected, of the 700,000 cars sold during the clunkers sale frenzy, only 125,000 are believed to be sales that otherwise would not have happened.  Each of these additional car sales therefore cost taxpayers $24,000!
• Researchers at the University of California - Davis figured that the reductions by the program of CO2 emissions cost $237 per ton.  Carbon emissions credits cost only about $20/ton.
• The reduction in the emissions of CO2 is less than that Americans emit in one hour.  At least the plants that would have loved that extra CO2 were not seriously deprived of their food.
• The reduction in gasoline use is equal to that Americans use in 4 hours.
• During this recession, many people cannot afford new cars.  Unfortunately, the number of older, used cars on the market was decreased remarkably.  With more demand for less expensive cars and less used car supply, the cost of the average 3-year-old car is up more than 10% since last summer to nearly $20,000.  Some popular models are up more, with the Cadillac Escalade up 36% since last July to $35,000.
• A great deal of American wealth was destroyed.

Jeff Jacoby concludes his commentary with this:

When all is said and done, Cash for Clunkers was a deplorable exercise in budgetary wastefulness, asset destruction, environmental irrelevance, and economic idiocy.  Other than that, it was a screaming success.

I wonder how many people who traded in a clunker for a new car and new car payments have regretted that decision as this recession goes on and on and on?  In some cases, the traded in clunker would have been worth more than $4500 by now, even if it was not then.  It is also worth noting that $3 billion spread over the 139,919,000 people employed in August 2010 means the average cost to each employed worker of the program is $21.44.  Paying that much for a destructive program makes me a bit angry.  I could have spent that money on paying down my debts or on one or two good books.  Of course, this foolhardy program is replicated by thousands of other foolhardy government programs, which have caused the federal budget deficits to soar since the Democrats took over control of Congress, and even more so since they usurped the presidency.  Thanks for taking that $21.44 multiplied many thousands of times away from me Obama and you socialist Democrats!  Payback time is coming neigh! If only we could force you guys to pay back all the deficit money you obligated the rest of us for.