It looks like this debate will soon be settled if it doesn’t encounter any resistance in the Senate: House OKs $2 billion more for Clunker program http://money.cnn.com/2009/07/31/autos/cash_for_clunkers_update/index.htm
Maybe those of you who don’t want them to add more funding should call your senators.
My 10-year-old 242,000 mile Toyota Echo is ineligible, as it still gets 40 mpg! Why am I being punished for making a good decision 10 years ago??
Its the governments good intentions that seems to reward bad behavior.
Devils advocate,why should you be rewarded? because others are?
Would you want your 10 year old Toyota Echo to be eligible? You may drive the car to 300,000 miles. The depreciation on a new car, the extra insurance premium, particularly if you don’t carry collision on your Echo, any financing you may do or the lost interest on the amount you spend out of your savings, etc. will probably exceed the $3500-$4500 you get on the Cash for Clunkers.
Spending on a big item (cars, homes, appliances) is heavily influenced by psychological factors, ie how people feel about the economy and their own situation. While undoubtably there are many people out of work and in difficult financial situations. There are many more with jobs and money to spend but are holding back because “it could happen to me”. The reality is that it could happen to anyone.
A program like “Cash for Clunkers” is pushing some of those on the fence to take action regarding buying a new car. Therefore it is a stimulus program that is working, perhaps too well! Since the auto companies have been leading the charge of this recession (along with banks and housing) this seems to be a well targeted program that is making a difference quickly. Remember the advanced refund checks from the prior Bush administration ended up more in bank deposits and paying off debt and didn’t have the impact at retail where it was supposed to be a stimulus.
This program is working, it is moving cars and helping at least one depressed segment of the economy. Getting a few gas hogs off the road won’t hurt either. A small drop in our aggregate fuel comsumption has a big impact on the price at the pump.
Perhaps a few people will over shoot their budgets. I suspect most will be able to afford the payments and benefit for spending less for fuel that will help them keep up with the monthly payments.
Saving enough in gas to “help make up monthly payments” is pie in the sky thinking.
Cut back on spending,be conservative,a new car is never a good investement just from the deprication aspect.
You make a good point Whitey. If we don’t become more proactive about opposing these expendatures of our tax dollars we’re the ones that will suffer the results.
Who was it that said “a billion here, a billion there, and first thing you know you’re talking about REAL money”?
A good personal policy to live by. However economies are driven by “spend, spend, and spend” some more. I don’t live that way either, simply can’t afford it.
But the good old American Dream economy is driven by spending, consumer spending to be exact and the CARS program is driving the spending. Oh, and borrowing, borrowing, and borrowing is part of the spend, spend, spend cycle and borrowing stimulates the economy too. America does better when we spend than when we save.
I don’t agree with it either. I think the malls are full of junk that ends up in garage sales eventually. It is just the way our economic system works.
Yes, the feds wnat us to spend more. It’s now our fault that the economy is in trouble because we don’t spend enough.
Trouble is, I don’t have enough of what it is they want us to spend! And if i did I’d hoard it, because along with taxes and fees, tolls, gas, and interest rates going up all around us, we’re also going to have to “share the pain” of the cost of health care!
Sorry, I’m not “buying” it. The road to economic prosperity is paved with our being allowed to keep more, and that is exactly the opposite of what these programs are causing. They’re trying to get us to spend more…and take out loans…by subsidizing our spending with our own tax dollars. I content that it’s badly flawed economic policy.
Mark my words, we’ll live to regret this.
However, I have to admit that if everyone else spends more I’ll be able to find more good stuff at garage sales!
I have done some research, and the ENTIRE car MUST be destroyed. not just the engines.
this entire mess started out with people buying cars they could not afford. people then started wising up, and started to buy 2-3 year old cars. Less demand for new cars. Fun fact: a brand new car loses approximatly $1000 in value the second it leaves the lot.
Yes,perceptions do indeed influence the market-Kevin
The taxpayers are not buying the clunkers, they were tapped out long ago…The Chinese are buying the clunkers and a lot more every time they snatch up our Treasuries debt offerings. None of this will ever be repaid (not a single cent ever has been paid back, ever) so why worry about it??
Most of the posts here were written by jealous motorists who don’t have a clunker to turn in…WWWAAAAAAHHHHHHHhhhhhhhhh. Finally, we will get all those 1975-1995 Road Oilers into the shredders where they belong. Look at it this way. If people don’t buy any new cars, very quickly, there will be no decent used cars for the rest of us…Trickle-down economics at its best!!
Caddy,don’t you know that one of the conditions to be considered for the program is that the car be a 1984 year model or newer? Sort of blows your 1975 vintage clean-up away doesn’t it.
You make it sound as if the dealers are sending the cars to the crusher. They are not, the fed’s are sending them (the governments rules).
The salvage yards are able to sell certain parts off the car before being crushed. Originally the engine and drivetrain could not be salvaged but I hear the trans is being able to be sold also. A solution of sodium silicate and water will be introduced into the engine after the oil is drained. This is basically liquid glass which will seize the engine while being ran for a couple of minutes.
No it should not. We do not need another another bailout. I cannot afford the money Obama is spending for no reason.
So, the CARS programs has been a huge success, a shot of adrenaline for an ailing industry. What now? Do we fund it again? And what about when the entire $4B is expended? What does the auto industry, now saved by yet another artificial, taxpayer funded influx of capital, do then? Do they then try to survive on their own in a market now depleted by the CARS program of a large number of new-car buyers? Or will this artificial market support now need to be continually funded over and over to prevent another collapse of the industry?
History is repleat with artificial taxpayer-funded support structures to protect industries. Can anyone name me one that has gone away? Even the tobacco industry is the beneficiary of millions in federal subsidies while at the same time we spend countless millions to convince people to stop smoking.
What now, guys? Do we forever have another mouth to feed?
You know what, this being a different perspective, I think I’ll move it to a new posting.
I’m sorry, I didn’t know that the 'yard could remove certain pieces.
Although this is still needless destruction of fully functioning cars (the rules state the car must be in running condition).
it’s like buying a bag of Cheeto’s, putting them on a shelf for a week, and throwing them away because they’re a week old. wouldn’t it be better to donate your Cheetos to the food pantry, then to throw them away?
I agree with Roadrunner here. The problem with our economy isn’t that people are not buying enough. The problem is that easy credit encouraged people to buy more than was wise. First we had a stock market bubble where people could buy stock on margin (usually financing half of the purchase). Then we had a housing bubble because of easy credit and an under-regulated mortgage industry (whether there weren’t enough regulations or those regulations were under-enforced is a matter of debate). Now people are making decisions about investing in the stock market and in real estate based on what they can afford. Then here comes the auto industry, complaining about the fact that their bubble has burst. People are making wiser choices about automotive purchases based on what they can really afford, so what does our government do? They create another unsustainable bubble in the auto market.
When will we learn? Economic bubbles always burst. The companies, the economy, and we Americans would be better off if we all settled for a sustainable level of economic activity. We live in a culture where we believe if business isn’t growing, it may as well be shrinking. That culture leads to economic bubbles, which might give you high profits in the short term, but those high levels of growth are never sustainable in the long term.
Most of the posts here were written by jealous motorists who don’t have a clunker to turn in…WWWAAAAAAHHHHHHHhhhhhhhhh.
Caddyman, I don’t think it is fair to say that. I am not jealous. Even if I qualified for this program, I would not want to take on a new car loan right now.
Also, haven’t we learned that “trickle-down economics” is a myth? The fundamental principle of “trickle-down economics” is that it is supposed to help everyone. It doesn’t. When we practice “trickle-down economics,” (or what I call corporate welfare), the rich get richer and the poor get poorer.
I might be a liberal when it comes to social issues, but I am also a fiscal conservative. This “cash for clunkers” program is bad for the USA, especially as you consider the interest that will have to be paid on all the money it is costing. The auto makers need to learn how to survive and thrive in a market that isn’t artificially inflated, and this program isn’t going to help them do that. If anything, it will send the message that they can keep doing business as usual.