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cash for clunkers Archive

Saturday

5

January 2013

4

COMMENTS

Cash For Clunkers – As Bad For The Environment As It Was The Economy

Written by , Posted in Big Government, Economics & the Economy

The economic failure of the Cash for Clunkers program are well understood, despite the administrations insistence it would function as economic stimulus. But the administration also trumpeted environmental concerns as a reason for instituting the subsidy program. So how did it do on that front? Miserably:

According to E Magazine, the “Clunkers” program, which is officially known as the Car Allowance Rebates System (CARS), produced tons of unnecessary waste while doing little to curb greenhouse gas emissions.

The program’s first mistake seems to have been its focus on car shredding, instead of car recycling. With 690,000 vehicles traded in, that’s a pretty big mistake.

According to the Automotive Recyclers Association (ARA), automobiles are almost completely recyclable, down to their engine oil and brake fluid. But many of the “Cash for Clunkers” cars were never sent to recycling facilities. The agency reports that the cars’ engines were instead destroyed by federal mandate, in order to prevent dealers from illicitly reselling the vehicles later.

The remaining parts of each car could then be put up for auction, but program guidelines also required that after 180 days, no matter how much of the car was left, the parts would be sent to a junkyard and shredded.

Shredding vehicles results in its own environmental nightmare. For each ton of metal produced by a shredding facility, roughly 500 pounds of “shredding residue” is also produced, which includes polyurethane foams, metal oxides, glass and dirt. All totaled, about 4.5 million tons of that residue is already produced on average every year. Where does it go? Right into a landfill.

Another terrific showing by central planners.

Friday

4

June 2010

0

COMMENTS

Sunday

20

September 2009

0

COMMENTS

Car Sales Tie Record Low

Written by , Posted in Economics & the Economy

Car sales way down:

Edmunds.com reports that “September’s light-vehicle sales rate will fall to 8.8 million units . . . the lowest rate in nearly 28 years, tying the worst demand on record. After the cash-for-clunkers program boosted August sales to their first year-over-year increase since October 2007, demand has plunged. In at least the last 33 years, the U.S. seasonally adjusted annual rate has only dropped as low as 8.8 million units once — in December 1981 — with records stretching back to January 1976.”

Following the fake success of the “cash for clunkers” program, it shouldn’t come as any surprise that new car sales have plummeted.  One of the criticisms repeatedly registered against the plan was that it would, among other things, merely capture future sales that would have been made anyway. A nice government handout can successfully entice people to go for that new car a little bit sooner than planned, but it has had no significant on car sales or the economy as a whole, and a dubious environmental impact at best.

Monday

24

August 2009

0

COMMENTS

Cash For Your Economy

Written by , Posted in Economics & the Economy, Government Meddling, Waste & Government Reform

Looking to expand the incredibly wasteful, bureaucratic failure known as Cash for Clunkers, the brilliant Barack Hussein Obama brings you Cash for Refrigerators (and other working appliances you don’t need to replace)!

How long must this economic myth – that we can grow the economy by destroying things – persist?  Encouraging people to spend money replacing appliances that still work means they will have less money to spend on new purchases.

The point of concerning ourselves with the economy in the first place is to maximize growth and raise everyones standard of living.  This can only be done by producing, not destroying.  It’s not enough simply to create work for some people.  If that was all we wanted the government could pay them to dig holes and then fill them up.  The point is to have productive jobs.  Replacing working appliances is wasteful, not productive.

If your goal is to get from point A to point B, the first thing you have to do is get off the treadmill.

With his every scheme, this President shows that he expects us to trade in our economy for a shiny new government handout.  It’s guaranteed he won’t be paying out full value, though, since the government has to get its cut.  After all, destroying cars, refrigerators and appliances is hard work, and bureaucrats can’t be expected to do it for free.

Monday

3

August 2009

4

COMMENTS

Cash For Clunkers "Success" Provides No Benefit To Economy

Written by , Posted in Economics & the Economy, Legislation

The cash for clunkers program, which created an incentive (via handouts) for people to destroy perfectly usable cars, is being hailed as a giant success after blowing through its initial allocation of $1 billion.  Of course it’s a success if the measure of success is no more sophisticated than the government’s ability to get people to take money in exchange for doing something they were likely going to do in the near future anyway.  Congratulations, you’ve proved people like money.

Nothing about this “success” provides support for the claim made by the program’s proponents that it helps the economy.  That is, and always has been, pure nonsense.

This is an example of the classic broken window fallacy.  The economically illiterate would see a broken window as doing some good by providing business for window makers, glass suppliers, etc.  What these people ignore are the opportunity costs.  Money spent replacing a broken window can’t be spent on anything else, such as new clothes.  All that’s happened economically is that the business that would have gone to a clothing store instead went to a window maker. Meanwhile, total wealth has been reduced by one window.

Cash for clunkers is just like the broken window. Government has shifted business away from some sectors and toward new car dealers.  Meanwhile, every working car destroyed is a net loss for the economy.  To those who continue to insist that there are economic benefits to destroying perfectly useful (and thus valuable) goods, I offer to come over and burn your house down tonight so we can help the economy a little bit more. Think of the new construction work we’ll be creating!

The reality is that every dollar spent destroying and replacing working cars is a dollar that can’t be spent buying other new products.  People are more than welcome to argue that there are environmental gains that make it worth the cost (personally I don’t buy that), but when politicians claim that it benefits the economy they are either ignorant or lying.