Quote of the Day: Cash for Clunkers Meets Postman Pat Via Dr. Who Edition

Robert Farago
by Robert Farago

Our UK readers my be interested to learn that the Obama administration has introduced a rival to Postman Pat: Preliminary Pat. “The White House Council of Economic Advisers gave the [Cash for Clunkers] program a preliminary pat on the back Monday,” The Detroit News reports. “Saying it created or saved 21,000 jobs in its short, four-week life by forcing automakers to boost production and add shifts.” That, however, is not our money shot. A little wood, please, as the Council addresses the question of whether or not C4C simply bribed buyers to buy earlier than they would have. Stimulating new car sales but not actually increasing them. The Council admitted the possibility, but wasn’t fussed. “This time-shifting is valuable if the economy is in recession because the economy is likely to be closer to full employment in the future.” All the birds are singing, and the day is just beginning. Pat feels he’s a really happy man.

Robert Farago
Robert Farago

More by Robert Farago

Join the conversation
4 of 21 comments
  • Gossard267 Gossard267 on Aug 26, 2009

    Obviously, the most impressive part of the historical charts is the decline in the late 40's. The question is this: was that achieved through a dramatic curtailing of previously enormous government spending, a protracted period of unprecedented economic growth, or both? The answer, clearly, is 'both'. America had just exited the New Deal era and, much more importantly, WWII. Both, but particularly the latter, had seen staggering increases in government expenditures and deficits. Obviously, the end of a depression and the largest conflict of all time meant tremendous opportunity for federal budget reduction. See the more detailed charts here: http://www.geocities.com/gordonite32/philo/fedbgt.htm Particularly striking are the few years right after WWII; note the big (positive) gap between revenue and spending. So, big, big budget cuts definitely occurred. But, the other part of the measure is GDP. I think the record of explosive US economic growth during the post-war era is well known. The question is: what fueled that growth? Well, we could start with the singular fact that, in 1946, America was categorically the best place in the world to do just about any kind of business. Is that ever going to be true again? Not likely. Indeed, current US policy is, in general, directed towards making America a still costlier and more difficult place in which to do business. Other nations are rapidly following the opposite course. They will, of course, be happy to take our wealth, but I doubt very much that we can export enough jobs to Mexico, buy enough Chinese widgets, or educate enough Indian engineers to grow our way into massive, sustained GDP increases. As far as I know, no one, not even amongst those most heavily imbibing the 'green recovery' Kool-Aid, believes we will be seeing post-WWII GDP growth again. The Clinton era was, comparatively, small potatoes. Spending was kept in check by a balanced government, taxes were sharply increased, and there was a decent economic upswing. Could that sort of thing happen again? I suppose. But Clinton wasn't facing a debt-to-GDP ratio like WWII, which we will be in the near future. Obama's own numbers show us ascending the tall, black line on the left of the graph you link. As early as 2010, we will be above the number for 1950. I'm just curious what mechanism(s) will lead us back down the hill this time.

  • Dingram01 Dingram01 on Aug 26, 2009
    A little wood, please, as the Council addresses the question of whether or not C4C simply bribed buyers to buy earlier than they would have. Stimulating new car sales but not actually increasing them. I bought a car due to CFC. I would not have bought a car otherwise. You have to know that I'm not the only one. So that's an INCREASE in sales. How significant an increase? We'll probably never know.
  • Rnc Rnc on Aug 26, 2009
    have you seen the latest predictions that obozo I'm so sick of listening to that crap. From 2000-2008 we had.... The largest increase in the size of the federal government since the 1930's (DHS) The largest increase in federal entitlements since the 1960's (medicare prescription benefits) Fought two wars whose cost have actually made vietnam look like a policing action (remember "I'm not going to fire a million dollar missile to destroy a ten dollar tent", no instead we just spent a trillion to do it)...While massivily increasing spending on weapons that had no use in above wars. And significantly cut taxes (especially for the wealthy, good old trickle down economics, did anyone here get trickled on?), so we weren't actually paying for any of the above. All the while feeding an economic monster with free credit and almost no oversight or regulation. And what were the results of this grand economic policy.... A doubling of public debt, in 8 years we managed to double what had taken 40 years before it. And a complete collapse of global finance and asset values. But yuppers that Obozo fellow is going to ruin us! And I'm not republican or democrat I actually take the time to vote for whoever maybe makes alittle sense.
  • 50merc 50merc on Aug 26, 2009

    "you’ll be swimming in money to pay that debt down.” Not only that, there'll be pie in the sky by and by.