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Politics Cash For Clunkers Revisited

Discussion in 'Tilted Philosophy, Politics, and Economics' started by samcol, Jan 7, 2013.

  1. samcol

    samcol Getting Tilted

    Location:
    indiana
    remember the cash for clunkers program that was supposed to help the enviornment, and get the economy rolling again? well it looks like it failed on at least the enviornmental stand point, and i'm sure the middle class families didn't appreciate the used car prices rising.



     
  2. loquitur

    loquitur Getting Tilted

    and it didn't have much stimulative effect, either -- it just pushed purchases forward time-wise. After the program expired, sales fell off a cliff.
     
  3. Aceventura

    Aceventura Slightly Tilted

    Location:
    North Carolina
    It made cars less affordable for the working poor as well. The average price of used cars went up as fewer of these cars were available.

    It is interesting how belt-way liberals view the world and the ignorance they have of people struggling trying to make it. I was in the Chicago area over the holidays visiting relatives. In the Chicago area there is a maze of toll roads, it can easily cost $5 to $10 for a round trip somewhere (of course the poor folks can find alternative routes - less traffic for the rich, you know). If you go downtown Chicago, it will cost about $5/$6 an hour to park (of course poor folks can forgo enjoying downtown Chicago - rich people don't want a bunch of poor people running about.) Gas prices in Chicago are the highest prices you will find in the entire state, highest in the region, and at times the highest in the nation (heck, poor people don't need to drive). Oh, city vehicle tax, state vehicle tax, high insurance, high crime (car thefts, car break-ins) and bad roads. And the belt-way liberal wants to do cash for clunkers! Poor SOB's can walk -or take bad public transportation - nothing like the smell of urine in the morning.
     
  4. redux

    redux Very Tilted Donor

    Location:
    Foggy Bottom
    From a cost-benefit perspective, it was a success, resulting in $3-6 billion in sales (depending on who is counting) and another $2-3 billion in fuel savings by getting less efficient cars off the street...at a cost of $3 billion.

    As a long-term policy, I would agree it was not the best of ideas.
     
  5. loquitur

    loquitur Getting Tilted

    redux, I highly, highly doubt that the $3-6 billion of sales is new sales that would not have occurred anyway within the next 12-18 months. The program's value has to be measured in incremental sales over baseline, not by gross participation. I understand it's not easy to measure.
     
  6. redux

    redux Very Tilted Donor

    Location:
    Foggy Bottom
    Just presenting the other side....from the non-partisan GAO report.

    The GAO report found that "the program helped stimulate economic activity as measured by [vehicle sales, Gross Domestic Product, and employment]," and that "the CARS program put more fuel efficient vehicles on the road," with the average fuel economy of new vehicles sold under the program increasing by 59% over traded-in vehicles.
     
  7. Aceventura

    Aceventura Slightly Tilted

    Location:
    North Carolina
    I am amazed by how much our economy has been stimulated, given such anemic economic growth. But, I guess belt-way liberals need to feel good, so measure the positive and not look at the impact on people. So when, a single mom who can not afford transportation to work, drops out of the work-force, does it make a sound?
     
  8. rogue49

    rogue49 Tech Kung Fu Artist Staff Member

    Location:
    Baltimore/DC
    So basically you're announcing an ambiguity???

    It did neither bad nor good, the impact either way was variable.
    It wasn't a loser, but it wasn't a winner.

    OK, at least it was tried...then not a lot of beans. But no farts either. *poof*

    I'd say it's something neither to crow about, nor get your tight & curlies up in a bunch about either.
    So, on to the next.

    We've got bigger fish to fry....
     
  9. samcol

    samcol Getting Tilted

    Location:
    indiana
    yes, we should trust the people who couldn't get a small program to do what it was intended with saving us from the fiscal cliff. i love how people just willfully choose to forget about past debacles and think these same people will get something infinitely more difficult correct.

    "at least we tried"

    that sounds like a great motto to run a disaster of an administration
     
    Last edited: Jan 7, 2013
  10. loquitur

    loquitur Getting Tilted

    "At least we tried" is damned irresponsible. When the govt "tries" something, it affects other people's lives and does it with other people's money. And then the people who did the trying don't have to live with the consequences. But I guess the ones who tried feel better about themselves for trying, so the waste of other people's lives and money is worthwhile.

    As Milton Friedman said, the value of a program should be measured by its results, not its intentions.
     
  11. redux

    redux Very Tilted Donor

    Location:
    Foggy Bottom
    One can pick apart individual components of the stimulus program for not being 100% successful....and ignore independent analyses that suggest that the program achieved some level of success.

    Thats what opponents do.

    Very little that government does is 100% successful. But I want a government to face a challenge head on and not be afraid to fail, knowing that failure brings political consequences; a government that is willing to try new things rather than policies that we know have failed in the past.

    And surveys of economists across the board believe the stimulus program has been a contributor factor (along with Fed policies) in preventing the economy from falling into even deeper recession and contributing to nearly 3 years of steady (albeit less than ideal) economic growth.
     
    Last edited: Jan 7, 2013
  12. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

    Location:
    Toronto
    Well, perhaps it makes sense to keep perspective. This was a $3 billion program. That doesn't stack up that significantly to the 800 billion some odd dollars otherwise allocated to stimulus spending in 2009. As was pointed out, at least it stimulated $3 to 6 billion in sales, most of which likely occurred sooner rather than later, which isn't a bad thing if you're trying to avoid a liquidity trap.

    The program overall wasn't fantastic. It was great for some, it sucked for others.

    I don't think it's really anything to get too caught up on, nor do I think it's any indication of a "disastrous" administration. It's not even the same kind of issue as the fiscal cliff. One is a spending program, the other is the attempt to avoid reducing the deficit at a breakneck speed.

    And, hey, at least GM is still around.
     
  13. loquitur

    loquitur Getting Tilted

    any company can still be around if the govt is willing to take a $15 billion loss to keep it alive.
     
  14. ASU2003

    ASU2003 Very Tilted

    Location:
    Where ever I roam
    They should have had stricter limits on what cars could be traded in. Like cars that were 1989 and older, and cars that got less than 20mpg. But, they should have been made to buy hybrids or cars that could get over 40mpg (no trucks or SUVs).

    But, instead of just nationalizing the auto industry or providing them an even bigger bailout, they set up this program to try and get some business for the car makers and part manufactures.

    And they should have recycled the metal and reused parts that they could. But it was a rushed program to help the economy.
    --- merged: Jan 8, 2013 3:23 AM ---
    And the hit to the economy would have been much bigger if the US auto industry got taken out by the financial loan industry collapse and the housing markets in the Rust Belt tanking would have destroyed cities and reduced taxes by a lot over the next few decades...let alone the other businesses around here that depend on money from the auto industry employees flowing around their cities.
     
    Last edited by a moderator: Jan 15, 2013
  15. omega

    omega Very Tilted

    why not try it? people have been trying trickle down economics for 30 years, that hasnt worked, yet its the republican platform. Compared to that, this program should be implemented for everything. Got an old loaf of bread? bring it in, get a coupon for a fresh more nutritious loaf.
     
  16. Aceventura

    Aceventura Slightly Tilted

    Location:
    North Carolina
    So it goes with most government policy designed to micro-manage market activity - if there is a winner there will be a loser. I don't think the government should be in the business of picking winners and losers. In the case of old high pollution vehicles on the road, the role of government should be to try to make sure the real social costs are reflected in the price to operate these vehicles. If the real cost of these vehicles is greater than the real benefit, market forces will cause them to be removed.
     
  17. redux

    redux Very Tilted Donor

    Location:
    Foggy Bottom
    Start with the fact that the article in the OP did not even consider the economic impact.

    The Cash for Clunkers program came at a time when the economy was at its lowest and still shrinking.

    By any measure, it put $billions into the economy, kept many dealerships afloat and the resulting auto sales added to the GDP.

    As an temporary economic stimulus, it was a success. We can debate the extent to which it was a success.

    As an environmental program, it was not.

    In any case, it was certainly not a long-term policy to micro-manage anything.

    It was a short-term program that worked on the most important level....it was one small piece that contributed to preventing further recession when the economy was on the brink...and it paid for itself and more.
     
  18. Aceventura

    Aceventura Slightly Tilted

    Location:
    North Carolina
    It doesn't make a sound - see previous post.

    According to some sources the average price of used cars went up about 10% or $1800 after cash for clunkers. Who got screwed?

    Used car prices skyrocket a year after Cash for Clunkers « Hot Air

    Why do you ignore this?
     
  19. redux

    redux Very Tilted Donor

    Location:
    Foggy Bottom
    It accomplished its short term economic purpose...$3-5 billion in sales keeping dealerships afloat at a time when people were making the economic decision to postpone buying a car and circulating more money through the economy at a time when it was teetering and many of those jobs would have been lost.

    And it faded away as it should have.
     
    Last edited: Jan 8, 2013
  20. Baraka_Guru

    Baraka_Guru Möderätor Staff Member

    Location:
    Toronto
    If you want to look at it that way, there will always be winners and losers.

    This program was just one of many measures the government took to weather the financial disaster wrought by Wall Street's own methods of picking winners and losers. A few winners were self-selected, and there were many, many losers. These losers are still feeling the brunt of it, while the winners, despite strong indications of malfeasance, seem to have got off scot-free.

    Government intervention makes sense in certain circumstances. Not everything works, and none of it is going to be perfect. But then again nothing is.

    The worse option would have been to sit back and wait for the invisible hand of the market to fix things. The problem with that is it has never happened, and it never will.

    At least governments are accountable to the people. Markets are merely accountable to holders of capital, who are susceptible to the desire for profits, the fear of losses, and the other emotions that arise from the herd mentality.
     
    Last edited: Jan 8, 2013