How do you know that the money is diverted from other purchases, and not something that the new owners would have saved, at least temporarily? It seems to me that one of the ideas of the program was to jump start consumer spending. In that respect, it has been successful.
OK, so I heard GM is calling some employees back to work, at least temporarily. So that could be good news at least for the short term, and the credit goes to the CFC program.
Having said that I still believe in the free market.
Also “the late 90s Explorer” should still have some years left in it, unless it was not properly maintained. If it is maintained and in good running condition, then I am not sure if it would make financial sense to buy a $15K+ new car that gets better gas mileage.
GM and Ford both have to increase production temporarily to build cars that the CFC programs has caused a sales spike in. As soon as the CFC program runs dry they’ll then have to lay off the workers again. They may even have to lay off more, because this spike in sales is taking directly from future sales.
Remember too that while they now need to temporarily produce more Focuses and the like, that money being spent for them is being diverted from other consumer purchases, which will cause layoffs in other sectors.
Those are the effects of the CFC program that Washington naturally isn’t mentioning and most media has chosen to ignore.
Uncle Turbo, I agree with you. So many people refuse to admit it is possible for government to get anything right. Perhaps that would change if their houses burned down because the volunteer fire department didn’t get there in time. I wonder if these people would be happy hauling their own garbage to the dump each week.
Objective studies have shown us that spending a little more money on public schools and colleges can save us money on things like police protection and prisons, but now that so many prisons are privately run, the prison industry has employed an army of lobbyists to keep the money flowing to them.
If government can’t get anything right, why do we let them fight our wars?
Mountainbike, you know I agree with you about the CFC program being wasteful, but…
we are seeing signs of recovery in the economy, though not necessarily in the unemployment numbers. We don’t know what will happen to those auto manufacturing jobs after this program ends. Who knows? Things might continue to improve. (might… I’ll cross my fingers!)
Whitey, you know I respct your opinions, they’re the well thought out perspectives of an educated and thinking man, but I’d have to ask where the signs are if not in the unemployment numbers, the Dow or the NASDAQ.
From my chair I’m seeing unemployment over 9% (15% in some areas like Rhode Island), a very shaky stock market, a deficit that’s gone from $500 Billion to $2 Trillion, and state budgets that are ravaged, causing rises in usery fees, sales taxes, state budget deficits, state furlough programs and layoffs, and cutbacks in services both state and federal. New taxes being imposed to try to balance budgets, such as “tent taxes” (real estate taxes being imposed on those renting space in campgrounds), being imposed here in NH are expected to have devastating effects on other industries, in my example the recreation industry.
With the exception of the armaments industry I can’t see any industry that’s showing signs of long term improvement, or even stability.
I sincerely hope I’m wrong.
We are NOT in a recovery…What every analysis I’ve heard has said is that there are signs the Recession is SLOWING…It hasn’t hit bottom yet and won’t for a few months. A recovery is when we are no longer in a Recession. As for unemployment…Layoffs will happen long after the recession is over. Companies don’t like to rehire until the economy is clearly on a path of recovery. So if the recession ends by the end of the year (as many predict), layoffs will still continue for up to a year or more afterwords.
A lot of 1990s Explorers or equivalent medium to large SUVs could easily have over 200,000 miles on them. That’s 10,000 to 20,000 miles per year. Even a low mileage, loaded 1999 Explorer has a value of just $4500. C4C is a very good deal for those folks.
To me it’s sort of like the old football word puzzle, “if with every hike you go half way to the goal line, how many plays will it take to get a goal”?
As unemployment, market figures, and other economic indicators get closer and closer to zero, the rate of drop must decrease unless they hit zero itself.
Whitey, you know I respct your opinions, they’re the well thought out perspectives of an educated and thinking man, but I’d have to ask where the signs are if not in the unemployment numbers, the Dow or the NASDAQ.
The most basic definition of a recession is at least two consecutive quarters of negative GDP growth. I freely admit that unemployment numbers, and to a lesser degree, stock market performance are important barometers of economic health, but when using the term “recession,” the GDP numbers are all that really matter (technically). Let’s face it, the stock market is influenced by the economy, but we have seen, historically, that the stock market does its own thing, sometimes going against the grain of the overall economy.
Mike, I didn’t say that we are in a recovery. I said we are seeing signs of recovery, which isn’t necessarily the same thing. In the strictest terms of the definition of a recession, however, we are seeing GDP numbers, some of which are stagnant, and some of which show a mild swelling of growth. What we don’t see is negative growth, so even though the economy continues to struggle, it isn’t technically a recession right now. Most importantly, Mike, my main point is that none of us knows what the economy will do when the Cash for Clunkers program ends.
Evidently, Mike, you and I listen to different analysts, who have differing opinions. Let’s agree that they, and we, disagree on the current state of the economy, but in general, we agree that people are still struggling, and will continue to struggle. For those people, looking at their personal lives, the recession continues.
Unemployment is usually the last thing to recover. But I still think that for someone who lost their job, being called back to work, even if short term, is great news. So at least in that sense if the CFC program has helped that group, the money spent is worth it. Now bailing banks and financial institutions out and watching their CEOs get bonuses is a whole different story IMHO.
We will never make it to the goal line" halfway measures availed us not"-the fat days are over,is sitting on ones hands a while that hard to do?
One of the biggest problems I see with this program is the stipulations,plus the “pie in the sky” aspect,as long the temperature creeps up very slowly,we will not try to leave the pot till its to late.-Kevin
Well the CFC program ends on Monday…unless congress adds MORE money to the program.
When this is over the dealers will just play the numbers in some other fashion.
This wave of sales will create an ebb on the other side. To maintain sales, manufacturers and dealers will invent new programs, rebates, discounts or whatever you want to call them.
I was advised by my salesman to just wait for the year end deals, to look only at the bottom line and probably see better numbers than now durring c.a.r.s.
The one problem with this program is that it sparked such a GREAT interest cars sales really spiked. When this happened…dealers didn’t have to discount cars in the program. When sales drop off again they’ll now start offering deals again.