Have you gotten your $4500 Cash for Clunkers rebate from the government yet? I bet you haven't.
Why?
Because you probably didn't buy a gas guzzler that qualifies. So how does it make you feel to know that you and the rest of your fellow taxpayers are subsidizing people who made the bad decision to buy one of those Clunkers. If you're like me, you think it's a blatant rip off.
Some of the defenders of this program tout the improved national fleet mileage and resulting reduction in gasoline and green house gas emissions. But even under the most optimistic assumptions, the impact is truly negligible, about the same as what the U.S. burns every 22 seconds. And this is at a cost to the taxpayers that is about seven times what "Cap and Trade" carbon permits trade for in Europe.
Proponents of this giveaway also cite the great public response to the program which is jump-starting the sales of new cars.
Sure. People will gladly accept a $4500 gift.
Auto sales that were postponed while this program was being debated and those which were planned for the future are being consummated now, making it pretty likely that sales will drop once the program expires. Additionally, there are a bunch of negative effects. One, for example, is the impact it's having on the car repair and aftermarket parts industries, which are being badly hurt by the decision to scrap the clunker cars instead of repairing them.
This program is just one more example of the government picking winners and losers. While advocates of more government intervention tout how programs like this and other "stimulants" are enhancing the economy, to me it's just the government distorting the free enterprise system.
Whether it's Cash for Clunkers, subsidies for underwater mortgage holders or any of the other government interventions implemented recently, the negative impacts often outweigh the positives.
Also, let's be real. There's no free lunch. Somebody has to pay for all this massive spending. That somebody is us, our grandchildren, or even better, now that I think about it, China.
