By on June 4, 2010

Anyone still feel like arguing that Cash For Clunkers was a good use of nearly $3b? [Coyoteblog, via Instapundit]

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60 Comments on “What’s Wrong With This Picture: A Giant Clunking Sound Edition...”


  • avatar
    rnc

    Yeah I will, and maybe it would be better if you included previous years (other than the end of days time frame) to see if there is normally a spike during summer and then drop off as people begin to spend/save money for the holidays and then kicks back up again after tax time. (you can even see the little spikes referencing what I am asking in the graph given)

    • 0 avatar
      Nicholas Weaver

      The graph is seasonally adjusted: the spike and plumet is clearly abnormal because any such consistant seasonal effects have already been removed.

    • 0 avatar
      Facebook User

      All the data agrees that there was literally no benefit to C4C. There is no spike there in regular years. C4C spent 3 billion dollars we didn’t have and Americans bought 3 billion dollars worth of cars more than they were going to. That’s not including the millions in bookkeeping costs or the hassle of dealing with the federal government for dealers. It equates to borrowing money to buy new things in the middle of a recession and didn’t jump start the economy or anything else. It was a joke of a program and it’s clear to everybody.

    • 0 avatar
      daga

      Something’s wrong with that chart. I suspect it is just the line item for Domestic Auto Retail, which traces back to the CAFE split from 30 years ago where fleets were separated into domestic car, import car and light truck. If that is so, then the source data should be the BEA’s NIPA, not the census. and BEA sources Wards for their data, and wards probably gets there’s from autodata. It could also be the dealer revenue reporting, which would be normal for the Census Bureau to track, but isn’t a clean look.

      The normal way to look at it is monthly SAAR in units using the BEA adjustment factor. On that more typical basis if you just draw the trend without july-sept, the it would be something like 10.2 in that period. Instead it was (According to Autodata)
      jan 9.6
      feb 9.1
      mar 9.7
      apr 9.2
      may 9.8
      june 9.7
      july 11.2
      aug 14.1
      sept 9.2
      oct 10.5
      nov 10.9
      dec 11.2

      Whoever put the chart together doesn’t understand the data sources. So, yes it had a positive impact on sales. July +1MM, Aug +4MM and Sept -1MM so 4 million incremental sales by farmer’s math.

    • 0 avatar
      Contrarian

      Sociological and anecdotal justifications notwithstanding, it’s pretty hard to argue that C4C wasn’t a total waste of money, especially since the chart is seasonally adjusted.

    • 0 avatar
      daga

      Contrarian: Per my last post, I find it straightforward that it helped sales. 4MM SAAR over about a month is something like 350k units. Of that it looks like 25% were pull aheads of new sales. maybe the rest were pulled from used or maybe they were truly incremental, but to the new car business, it was great. Why do you say that it is hard to argue that is wasn’t a waste of money? other than ‘did it boost incremental sales’, anyone can have an opinion but on the numbers, it seems clear to me that it helped.

  • avatar
    lilpoindexter

    I just wish the “clunkers” had been available for purchase…or distribute them to poor people, or something.

  • avatar
    briancataldi

    Little too simplistic to say “yay or nay” for cash for clunkers. Right after the drop there was a gradual increase in sales, who can say that has no relationship to people feeling just a little better about the industry after C4C. That dotted line is assuming it would go in that direction but we have no proof of that.

    Just syaing and anyway $3B really is nothing…compare that to the countless endless studies, wars, etc that we spend everyday and it is a drop in the bucket.

    • 0 avatar
      jkross22

      “Just syaing and anyway $3B really is nothing…compare that to the countless endless studies, wars, etc that we spend everyday and it is a drop in the bucket.”

      Wow. Just wow.

      Maybe BP will feel the same way about the invoice they just got from Uncle Sam and not pay it. After all, it’s just $78 million.

      It’s great to see people that use this argument defending gov’t boondoggle programs like this. Ironically, they are often the first to speak out against tax cuts for those that create jobs.. you know, the “rich”.

    • 0 avatar
      briancataldi

      Amount paid to KBR, a former Halliburton division, to supply U.S. military in Iraq with food, fuel, housing and other items – $20 billion

      Portion of the $20 billion paid to KBR that Pentagon auditors deem “questionable or supportable” – $3.2 billion

      Interestign little fact above about the war on Iraq…on top of the over $7Billion per month spend on the war since 2001. Not trying to make this political or anything but the REAL waste of the government is not in C4C…that is just what car bloggers fixate on. Grow up and look at the real issues.

  • avatar
    calvin1234

    In my case I would have never bought a new car if it hadn’t been for C4C. I traded in my ’96 LHS boat for a fuel efficient ’09 Focus.

  • avatar
    gslippy

    The irony of CFC is that it helped the imports more than the domestics.

    • 0 avatar
      mythicalprogrammer

      Pft.. if domestic make cars that people want then there wouldn’t be any irony.

      Some of those Japanese car models are assemble in USA and most of the parts are made in USA. Unlike Mustang, assemble in USA and most of the parts are from Mexico. Camaro is assemble in Canada.

    • 0 avatar
      gslippy

      @mythicalprogrammer: You are correct. Part of the incentive behind CFC was to help the UAW, which obviously didn’t benefit as much as the non-UAW automakers.

  • avatar
    mtymsi

    Being from metro Detroit I’m sure gives me a different perspective than many other TTAC posters. I still think it was a great program to spike car sales and create interest for buyers that didn’t qualify for the program. It put people back to work in my area at both OEM and supplier companies. I know it is a selfish perspective but on the other hand no area of the country was/is harder hit than mine. As noted the cost was a drop in the bucket comparatively speaking and I don’t think there is anything else the federal government could have done that would have had a more beneficial effect for SE MI. I would also note that MI residents continually pay more in federal taxes than we receive in federal benefits so it certainly is not as though we received an undeserved or excessive benefit from the program.

  • avatar
    rnc

    I thought the import/domestic thing was out seeing how many plants they have in the US? $3 billion dollars in comparison to the 100’s of billions that go to weapons programs that will never be used that are replacing weapon systems that were never used, but we call that having a strong defense. I mean the whole idea was to generate sales during the worst downturn in history, while at the same time generating future sales by removing the cars traded in. Seems to me to be one of things done by washington that actually worked. It would have been bad if like other entitlements, it was just continued and increased into perpetuity without actually paying for it. Politicians can call it environmental and you can step all over that if you want to, but “smart” people realized what it was actually for.

  • avatar
    CliffG

    $3b is not nothing, even here in the $13 trillion GDP US. The average middle class family pays around $5k in income tax a year. That $3b constituted, uh, quick math, a city larger than Seattle of all middle class taxpayers forking over money to pay the down payment for a bunch of people to buy some cars? No. Keep in mind every time some politician (pick your party poison) flies off somewhere, all of your taxes you paid probably went for his/her plane fare. Unless it was a big politician (and his 3 747s) and then it was your entire block. But I am not too “smart”, so I don’t get it. Didn’t Halberstam write a book about the really “smart” guys and Vietnam? Plus ca change….

  • avatar
    OhMyGoat

    For all it’s faults, political and otherwise, at least C4C got my long retired dad out of an aging Chevy 3/4 ton p/u (from his commercial fishing days) and into a Honda Fit. Infinitely more practical for carting my mom around and heading to the lake to go fishing with my uncle.

  • avatar
    Dr Lemming

    Follow the links. This analysis comes from some pretty conservative sites. Why must automotive blogs be joined at the hip with the right wing? I still contend that a politically moderate car blog would do really well. Apparently that won’t be TTAC.

    Sure, the C4C program could have been designed and administered better, but that’s the nature of politics — it’s messy, colored with self interest and not always far sighted.

    That said, the C4C program was grounded in standard economic theory — counter-cyclical government spending (re: “pump priming”). Of course, fiscal conservatives have never warmed to this idea, e.g., arguing simplistically that you “shouldn’t spend money you don’t have.” Well, they did it their way during the early days of the Great Depression and look what happened.

    • 0 avatar

      No, really… follow the links. Coyoteblog links to the US Census data that underlies the chart, so unless you’re suggesting the Census is politically biased I’m not sure I understand the critique.
      I also don’t see how making a common sense argument against Cash-for-Clunker programs somehow makes TTAC less moderate (for the record, I consider myself a socially liberal, fiscally conservative moderate). History shows that neither side of the political equation easily resists wasteful spending… for example, C4C enjoyed bipartisan support.
      The point here isn’t “one party right, other party wrong,” it’s “let’s not waste more money on this in the future.” I think the point still needs to be made.

    • 0 avatar
      Cammy Corrigan

      I can’t speak for other TTAC writers, but I consider myself a socialist.

      Having said that, I struggle to see value of CFC. Firstly, it tried to create demand that clearly wasn’t there. This had two effects: 1. It encouraged people to trade cars in that were already working to pay for another car which they didn’t really need (and is far more environmentally unfriendly) and 2. It staved off a correction which the market badly needed.

      Secondly, this whole exercise was paid for with money which the U.S government didn’t really have.

      Like in Europe, we have gross overcapacity and the market needs to correct itself. Now if Vauxhall/Opel go bust, that’ll be the best thing that could happen to the market. In the German market alone, Volkswagen and Ford will easily fill the hole left by Vauxhall/Opel.

      Still think dishing out money to stimulate demand is a good idea? Start dishing out cheap loans to people and lower your standard of customers (I.e deadbeats) just to meet sales figures.

    • 0 avatar
      DweezilSFV

      Thank you, Edward. There is plenty of debate whether Roosevelt’s solution [similar to the so called pump priming being done today] managed to extend the Depression by a decade.

      After being treated to a PR onslaught in the establishment media as to what a roaring success CFC was, we are in no dire peril of being buried in right wing propaganda. The report from a so called “conservative” web site using the government’s own data as a counter argument is pretty much what the MSM should have done on it’s own.

      Full disclosure: I no longer have an allegiance to any political party after the savage and self serving abuse of the system by both Demos and Repubs over the past 20 years. Neither has an idea, a moral or ethical system that isn’t up for sale to the highest bidder.Liars whores and thieves. A pox on both their houses.

    • 0 avatar
      Amendment X

      As if the New Deal lifted us out of the Depression? That, sir, was World War II. The New Deal put people to work, but it didn’t fix the Depression.

      When government uses tax resources to direct consumer spending in ways other than what those consumers would do on their own accord, then the market behaves irrationally. Artificial demand, propped up by government, leads to artificial supply problems. Government CANNOT effectively meddle with the market to achieve political goals.

    • 0 avatar
      Dr Lemming

      Edward: Apparently in the age of the intertubes numbers on a chart can substitute for substantive analysis. The data are interesting but raise more questions than answers. How about finding a peer-reviewed study in a credible journal that doesn’t have an ideological axe to grind? That would elevate the discussion above the usual blogospheric food fight.

      TTAC does have a history of right-leaning political stances. That has lessened under your leadership (and is appreciated), but here is an instance where it continues.

      You, of course, have a right to your opinion. I’m not a hard-core defender of C4C, but do think that for all of its flaws the program did help “pump prime” the economy. It also wasn’t all that much money in the grand scheme of things.

      I don’t think most people realize how close the US came to a complete economic meltdown. When you’re in that deep of crisis, it’s better to try stuff rather than simply sit on your hands like Hoover did at the beginning of the Great Depression.

    • 0 avatar
      LennyZ

      I agree with Dr. Lemming in that the tone of TTAC seems more right leaning than left but I think it comes not from a politically oriented stance but more of a complaintive, government bashing that is so easy to do. Rail against big government and you will always have people around to agree with you, if agreement not analysis is what you want. I think the CFC program got a lot of POS off the road and more fuel efficient cars on the road. You can pick apart any governmental program by plotting some numbers and saying look at this. Did you know that since Medicare started most of the people receiving benefits died!

    • 0 avatar
      bd2

      Probably not utilized in the best way, but C4C probably helped to keep Ford and GM afloat and ready to fight another day.

      As for the Great Depression and WWII, fighting the war ended up being the biggest govt. spending project in the history of the US.

      I’m a fiscal conservative, but sometimes one needs to spend $$ to get the economy going (likewise, while the bailout for GM and Chrysler wasn’t optimally managed, having them cease to exist as operating entities would have likely meant that the US would have experienced a depression instead of a deep recession).

    • 0 avatar

      well doc, you are spouting conventional Keynesian wisdom and not empirical knowledge. C4C is a standard spending program which Dr Christine Romer, The current Chairman of the Council of Economic Advisors, shows that such conventional wisdom is wrong. Spending program hardly ever stimulate economic activity. The merely transfer money from one group to another. If you want to stimulate economic activity, change tax rates.

      http://www.econ.berkeley.edu/~cromer/RomerDraft307.pdf

    • 0 avatar
      gslippy

      @Dr Lemming: If you want a different perspective, you can always read http://www.autoblog.com. There are plenty of CFC fans over there. I read it to see what UAW-loving, bailout-supporting people think about the issues.

      I’m not sure what your definition of ‘politically moderate’ is, but obviously nobody is forcing you to read this blog. Perhaps ‘politically moderate’ is the average of Left and Right. Considering that Cammy Corrigan declares herself to be a socialist, and I am a proud member of the Vast Right Wing Conspiracy, I’d say that TTAC provides a decent mix of all you desire politically. I even agree with Cammy occasionally on car matters.

      Unfortunately – and I think we’d agree that it’s unfortunate – cars and politics are inextricably linked, so nearly every article is bound to intersect with some aspect of politics. The author sets the spin, and is often rebutted by those of us who chime in. That’s all part of the fun, and I’d say you’ve contributed to keeping it fun by including your complaint. That’s what free speech is all about.

    • 0 avatar
      mythicalprogrammer

      @Amendment X

      So what the government suppose to do? If there wasn’t a WW2 it’s either let the whole economy collapse or do something. Which is Keynesian: do something. The dependent on this Invisible hand to correct the economy is self delusional. The economy itself is an artificial being and classic economic camp believe is that everyone is going for the optimal solution but that’s bull. What they neglect to factor in is the psychological factor, human behavior. Since the Market is artificial anyway we can therefore do whatever we can such as impose rules and try to stimulate it. The free market ain’t going to fix it self and you can see it’s not perfect because of economic bubbles and the recurring of it is proof of that.

      Take it this way, the first recorded economic bubble of Tulips. It took the Dutch decades to recover. Rather then waiting for decade the US government instate new rules and re-assess the risks while stimulating the economy.

      If bankers are too afraid to lend out money, unemployment is high, national debt is all time high, and consumers morale is bad then no one is stimulating the economy. We’re in a catch 22 because the economy need stimulating but no one is doing anything, the economy become stagnant. So instead of praying for the invisible hand to do something, the government stepped in -Keynesian.

      The Afgan and Iraq war is nothing like WW2 so it’s doesn’t help that much.

      “Government CANNOT effectively meddle with the market to achieve political goals.”

      You’re right. Having massive tax cuts while having two wars and passing Medicare plan D is meddling in the market. But to fix the market is something different. You need to spend money to fix the market. If the political goals is to get more fuel efficient cars to lessen our dependent on oil then so be it. It’s fine. At least they’re not trying the trickle down/starve the beast bull crap economic. Reagan and Bush 1 had to impose new taxes after the tax cuts anyway because tax cuts only add to national deficit. Get rid of the social programs! It’s a political suicide and both party will always want more programs anyway.

      The country can be like Orange Country California, where they were deep in debts and refused to raise taxes, they went bankrupt. Thankfully, we have people that thinks outside of the box.

  • avatar
    ckgs

    Don’t forget the other goal of C4C – getting less efficient cars (i.e., clunkers) off the road.

    • 0 avatar
      gslippy

      That goal has been disputed by those who calculate the total energy consumed to produce a new car and run it, compared with the energy required just to keep the old one on the road. I don’t recall whether this argument has any merit.

    • 0 avatar
      mythicalprogrammer

      @gslippy
      The cars were already produce. Why would you include that in to the argument? That’s a SUNK COST.

      That is almost similar to the argument of electric vehicles and where they get their powers, coal power plants.

  • avatar
    Lokkii

    Perhaps I’m only pointing out the obvious, but I have the impression from reading some of the comments that some commenters haven’t noticed that the size of the jump from C4C is exactly the size of the fall that followed it. In short, while C4C may have persuaded some people who wouldn’t have otherwise purchased a car to do so (see anecdotes above), it did nothing for overall demand.

    In short, the sales picture would have been the same. For those of you who like this argument when it applies to supporting the military, I’ll just say that there’s $3B we could have spent on the schools for the children.

    • 0 avatar
      texlovera

      Agree with regard to the spike. It just moved up sales a couple of months.

      CFC was a bust, and I’ll leave it at that.

    • 0 avatar
      Steve65

      My biggest complaint about the program was that is was restricted solely to people who could prove they didn’t need the money. ANYBODY who’s trading in a functional running registered car to buy a brand new car does not NEED a $3500/$4500 gift from the pockets of the rest of us. If the government desperately needed to give away $3B to “stimulate” the economy, fine. Give it to people who need it. Homeless. Unemployed/underemployed who can’t improve their job prospects because they can’t afford ANY car. Schools. Daycare for working families. Public works (a new WPA). But $3500 for middle class risers who want something newer and nicer? Fegh.

  • avatar
    Qwerty

    Show me the graph of what would have happened without C4C, and I’ll tell you whether C4C worked or not.

    • 0 avatar
      SV

      Amen. It’s difficult to fully asses the success of a program like this unless you know for sure what would have happened otherwise. For all the bashing the financial bailouts have received, we just don’t know for sure what would have happened had the government simply done nothing. Maybe the economy today would look the same (which I doubt), or maybe we’d be in much worse shape.

  • avatar
    mtymsi

    Sorry but I don’t buy the argument C4C merely accelerated the demand that would have naturally existed over time. The vast majority of C4C participants were not normal new vehicle buyers they were typical used vehicle buyers and more specifically buyers who wouldn’t buy anything until they had to.

    I know for a fact the program put workers at OEM and supplier companies in my area back to work and they are still working today. The point is it put them back to work sooner and that was the main reason C4C existed, to help jump start the worst economy most of us have seen in our lifetimes.

    You can argue the political correctness issue all day long but you can not argue with the proven results. The program worked, period.

    • 0 avatar
      braven

      It made a blip in the economy, with no verifiable lasting benefit. How is that a success? You may know people that went back to work and are still working, but that doesn’t necessarily represent the whole. The data shows that it did virtually nothing to help the economy.

    • 0 avatar

      Nonsense, the typical C4C buyer dumped kid-oriented vehicles like minivans and SUVs that were purchased when their kid were young for smaller cars. Typical used car buyers don’t buy new cars.

    • 0 avatar
      mtymsi

      You can’t say the data shows C4C did nothing to help the economy because no data exists for what vehicle sales would have been without C4C. What I am saying is the program helped my local economy and I’m sure that was of a small benefit to the national economy. C4C did exactly what it was intended to do, give a short term boost to auto sales. It is the fastest acting government stimulus program I have ever seen with measurable verifiable results.

      Keep in mind the entire purpose of C4C was a short term boost in auto sales not a long term benefit to the whole economy.

      It is true that typical used car buyers don’t buy new cars but they did during C4C which is exactly why C4C did not pull ahead normal new car sales. The trade ins were across the spectrum not just mini vans and SUV’s.

    • 0 avatar

      The money to buy the cars had to come from somewhere whether borrowed or taxed. Every dollar the government pulled from the economy to give to a car buyer was dollar someone else couldn’t spend on alternatives. The net effect, as Christine Romer has shown, is a wash. There was no economic stimulation.

      Your typical used car buyer doesn’t buy a new car period. He either can’t afford it or perfers lower total ownership costs by skipping the first few year depreciation. In the latter case C4C would have had to lower the price of a new car to that of a three year old car…didn’t happen. In the former case the car may already have been repoed because he couldn’t make the payments.

    • 0 avatar
      mtymsi

      Angela,

      Your contention is wrong. The rebate C4C provided in addition to the manufacturer’s rebates did drive the price of many new vehicles down to used car levels. Many of the C4C buyers were used car buyers who without C4C would never have bought a new vehicle. Typical new vehicle buyers do not trade old junk vehicles, they trade later model ones. I know this for a fact because I sold cars for thirty years.

      The program was intended to quickly boost vehicle sales short term which it did. C4C was never intended to provide a long term economic benefit. You can be completely opposed to the concept but it doesn’t change the measurable verifiable results.

    • 0 avatar

      First you will have show me data.

      Beyond that, the C4C selling period was not a normal situation. Owning a vehicle that met the C4C requirements was like holding a winning lottery ticket. Your worthless piece of junk was now worth up to $4500. Of course buyers would trade that car in if they were thinking about a new car. Why trade your late model primary car when you had an old minivan or SUV to get rid of that was now worth something. Remember the 13 year old V-8 powered Explorer went from worthless on the open market to $4500 at the dealer. Sounds like you are extrapolating from your experience in normal times.

    • 0 avatar
      calvin1234

      In my case I agree with mtymsi. I have always bought used until now. But with C4C I got 3500 from the program and 2500 from Ford driving the price down to the same as a two year old 30K Focus. It got me to buy a MADE IN THE USA car from an AMERICAN CAR COMPANY.
      I find that many who are opposed to the program are those who didn’t qualify (are jealous?) and were opposed to those who did. Grow up and get use to it. How much of our money are used for things or people that don’t help us directly? The list is almost endless.
      I am also insulted by those who hint that those who took out loans for their C4C cars are deadbeats who are going to default on those obligations. While I can’t forecast the future, I’m ahead of my payments after almost a year.

    • 0 avatar
      mtymsi

      Angela,

      The fact of the matter is the vast majority of traditional new car buyers do not own the older types of vehicles that were traded under the C4C program. The vehicles a traditional new car buyer typically trades are late model and worth considerably more than the C4C allowance. I am not speculating I am telling you fact. Ask anyone in the car business and they will tell you the same thing. Your statement that used car buyers are not new car buyers period is wrong as it relates to the C4C program. Under normal circumstances you are correct.

  • avatar
    braven

    Let’s see:

    1 It removed hundreds of thousands of useful vehicles from the roads, destroying useful assets prematurely.
    2 It helped the auto mfrs, but only temporarily, as the graph shows.
    3 It helped dealers, but only temporarily (see #2).
    4 It hurt dealers due to rules about disgarding the vehicles which resulted for some in high storage charges, and delayed re-imbursements.
    5 It cost a lot of taxpayer dollars, and not all taxpayers could participate, so it discriminated against all those whose vehicles didn’t happen to fall into the narrow catagory required, even though they helped pay for it. Essentially, we paid for part of someone elses car when I needed one myself (My ’78 truck wasn’t eligible).
    6 It hurt the used car market, driving prices up and ultimately hurting the very people it was designed to help.
    7 It helped those who were able to take advantage of it, unless they couldn’t afford a new car in the first place, and then it hurt the very people it was designed to help.
    8. It hurt the used parts industry by reducing the number of used engines available and putting wrecking years in a bind trying to process all the extra vehicles getting scrapped.
    9. It hurt charities that take vehicle donations, thus again hurting the very people it was designed to help.
    10 It didn’t help the economy because it wasn’t lasting.
    11 It helped the import manufacturers more than the domestics.
    12 It was another poorly thought out government program that was motivated more by politics than anything else.

    Yeah Niedermeyer, it was a screaming success. The ONLY people it helped were those who bought new cars, and even then only if they could afford to be buying a new car.
    In reality, it was one big waste of $3B, and the extended costs of it are much, much greater.

    • 0 avatar
      geozinger

      Hold up there, cowboy.

      I think Mr. Niedermeyer is on your side. If you look at his posts on this matter, I would say he falls into the anti-C4C crowd.

  • avatar
    reclusive_in_nature

    When you think about the differences between extreme left (wants everyone riding a bike) and extreme right (drive anything you want but don’t expect the manufacturer to install seatbelts) isn’t it obvious which way most automotive sites and it’s posters are going to tilt?

    • 0 avatar
      braven

      I’m assuming you mean that they would lean to right, being car people and all. But I’ve found two sites, Autoblog and Jalopnik to lean quite a bit to the left on many issues. More than that, they regularly bring politics into there blogs, which I dislike. I only recently started reading this site, because I was sick of the politics on those other sites. I will say though, that it’s puzzling. I hope this isn’t a regular thing here.

  • avatar
    braven

    To mtymsi,

    Please read my post again. I never said it did nothing for the economy.
    Also, there is a lot more data to look at than the data you mentioned.
    Why would or should anyone feel good about spending that kind of money on something that has a temporary effect? It makes no sense.
    This was, IMO and many others, the most poorly planned and executed government program in years. Quick yes, correct no.

    • 0 avatar
      mtymsi

      Again, C4C was never intended to provide a long term benefit to the entire economy. It was intended to provide a short term boost in auto sales which it did. The program did exactly what it was intended to do and in fact was much more successful than anyone thought it would be which is why Congress had to allocate additional funds to it.

    • 0 avatar
      mtymsi

      Also, as mentioned I did see a direct benefit from C4C in my local economy. If I lived in a different part of the country I may well feel differently about the program. It put people back to work when the outlook couldn’t have been bleaker. The amount spent on the program is such a tiny fraction of the economic stimulus package it is almost invisible. Look at the amount the financial sector received versus C4C. C4C provided a glimmer of hope when there was none especially in my area.

    • 0 avatar
      braven

      If your argument is that it was a good program to provide a temporary boost in car sales, then I would have to agree with you. But $3B for a temporary boost? Are you kidding me? What good is a temporary boost when we need a permanent cure? What good is this boost if it causes all kinds of unintended consequences that significantly hurt other industries and people?
      Congress loved it because it boosted sales, but they never looked past that to all the things is hurt. When you look at it as a whole (see my post above) it was a miserable failure.
      More importantly to me, I resent the use of my tax money to help only a portion of the population, and even more the domestic car companies. The manufacturers themselves in combination with the government caused their own demise. Why should I pay for that while I struggle to survive myself? Why couldn’t I turn in under this “great” program, my 6mpg crew cab dually for a new more efficient vehicle? Fail.

    • 0 avatar
      mtymsi

      IMO you can’t quantitatively measure the $3B cost against the results because there is no data or results for what would have been had their been no C4C. Peripheral things like auto supplier viability come to mind.

      The fact that you are opposed to C4C on principle is a different argument, one that as I said can be argued all day long but it doesn’t change the measurable verifiable results of C4C.

      I think you need to put everything in perspective. While it is true that the domestic manufacturers are entirely responsible for their circumstances it is also true that the national economy was in no shape for two of the three to cease existence. Had we not been in the throes of the worst economy since the Great Depression perhaps their would have been no federal bailouts. It is also a documented fact that GM and Chryco’s demise would have triggered numerous auto supplier close downs, the same suppliers that supply both the foreign and domestic U.S. manufacturers thereby causing a severe ripple effect across both the entire U.S. auto manufacturing industry and the entire economy.

      As regards all of the other negative effects you claim are the result of C4C the program was meant to aid the auto industry not individuals that would buy the cars that were junked or the parts from those cars. Many of the imported cars sold here are built here meaning those OEM/supplier workers benefited. Dealers benefited directly from the sales C4C created, they would not have been financially better off not to have sold the vehicles.

  • avatar
    mythicalprogrammer

    Not much of anything other than a graph.

    There’s a report that says Cash for Clunkers worked.

    http://www.maritz.com/Press-Releases/2010/Maritz-Research-Findings-Cash-for-Clunkers-More-Successful-Than-Previously-Reported.aspx

    Here’s a better graph (almost the same with more data):
    http://delong.typepad.com/sdj/2010/04/wow-cash-for-clunkers-worked-graph-of-the-day-for-april-7-2010.html

    It’s all how you interpret the graph and I think the graph that this blog provided is misleading.

    • 0 avatar
      mythicalprogrammer

      I’m sorry this post is similar to when Fox news told everyone that the Nuclear Security Summit’s logo looks like Muslim flags.

      http://tv.gawker.com/5517509/jon-stewart-calls-out-fox-news-for-anti+muslim-nuclear-logo-propaganda

  • avatar
    Mike Kelley

    I guess the C4C program worked better than most government programs. Unfortunately, that is not saying much. Just look at the $800+ billion wasted on the “stimulus” program.

  • avatar
    John Horner

    Meanwhile, another $33 Billion was just authorized to send yet more troops into Afghanistan. http://www.thefiscaltimes.com/Issues/Budget-Impact/2010/05/28/WP-Senate-Approves-Emergency-War-Funding-Larger-Aid-Bill-Stalls-In-House.aspx

    Eleven times more money than the C4C program, yet hardly anyone seems to be upset about it.

    • 0 avatar
      gslippy

      Yes, in spite of my opposition to CFC, it was ‘only’ $3 Billion. And if I had been in the market at the time, I would have taken advantage of it also.

      In the end, the 700k cars bought through the CFC program are only about 7% of the total for 2009.


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