Cash for Clunkers

January 5, 2010
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“It’s Cash for Clunkers! If you trade your gas guzzling clunker in today for a new car worth 20000 dollars or more, be sure you’ll get up to 4500 dollars back!” Check the math. This deal would blow away 15500 dollars. Who has that kind of money in this economy? In the article “Cash for Clunkers Helped Car Dealers, But Did it also help the economy?” Daniel Gross wrote about the positives and negatives of the Cash for Clunkers program. According to the article, Cash for Clunkers was a success. Sales were projected to top one million cars (which would be 2% higher than in August 2008). The government granted dealerships 2.58 billion dollars through this program. According to Gross, “The sales rate should be sustained beyond the end of the program.” The program encouraged people to buy new cars. Yes. During the program, people bought new cars instead of holding on to their old ones. Too bad this trend wasn’t sustained afterwards. After the program was finished, the sales rates fell back to where they were in 2008.
This program failed. Soon after the program ended, the sales rate on new cars fell back to where it was in 2008. The people who designed the program thought other markets would increase if the people were convinced risky spending is ok. It’s hard to believe a new car is a risky investment when there’s a 60 day money back guarantee attached. Where’s my money?
People didn’t even buy American cars through the program. The program was supposed to help American car companies. In fact, Toyota sold the most new cars through the program. Even though some Toyotas are made in America, it’s The Glorious People’s republic of China who owns Toyota. This just gave our money to China. Where did the $4500 come from? We borrowed the money from China to pay for this program.
They took old cars off the road. That’s good, right? Not exactly. The cars traded in could have been repaired, and driven for less than the cost of the new car, and still not significantly impact the environment. This means people who traded in lost money on the deal. What happened to the cars? They were crushed, and like most of our scrap metals, sold overseas to make cars in China. The cars could have been resold to lower income families. Some of them could have been driven for a few more years, and would have been reliable. These cars could have been bought by lower income families. Too bad the government would not allow any of the clunkers to be sold.
At least it had a positive impact on the environment…Or did it? According to Gross, the removal of older cars had an insignificant impact on the environment. All cars pollute. The increase of pollution with age is insignificant. America is not the real cause of climate change; it is countries like: China, India and other third world countries where they do not have pollution standards. Since these countries are the most populated countries, they have more cars being driven.
This program failed. It wasted time and money. Worst of all, it took cheaper cars out of the reach of lower income families, and forced them to buy new cars which they can’t afford.

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TheGrandLine said...
Oct. 30, 2014 at 8:30 pm
Toyota is a Japanese company. Not a Chinese Company. 
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