"Cash For Clunkers" Program Runs Out of Gas 594
Ponca City, We love you writes "The Washington Post reports that Transportation Secretary Ray LaHood has called members of Congress to inform them that the 'cash for clunkers' program will be suspended because the program has run out of money, and congressmen say they intend to ask the Obama administration to divert some funding from the existing economic stimulus package to maintain a scheme that they see as genuinely stimulative. 'Clearly, this has been a very stimulative program that's got consumers back into the car market. It's our hope that possibly more funds can be made available,' says Cody Lusk, president of the American International Automobile Dealers Association." If there is more funding, though, a report on CNET says it may come out of money to have been set aside for renewable energy loans by the US government.
Did I miss something (Score:4, Insightful)
Wow (Score:5, Insightful)
When you give people their own money back, they spend it.
Who'da thunk it?
Why, I think they could learn from this and practice some more evidence based policy by giving everyone their own money back, and then they could stimulate more than just Government Motors.
Clunkers is a clunker (Score:4, Insightful)
Then what I don't understand is that all of the car that are traded in, go straight to the car crusher. What about all of the families that are in need of a decent affordable car, but cannot afford to buy a brand new one? Why not give a tax credit to everyone who buys/owns a new vehicle that meets a certain MPG?
It just seems like this bill rewards those who are rich and were environmentally irresponsible over the last 10 years.
Proof Congresscritters are Economically Dense (Score:5, Insightful)
They estimated that $1 billion would be enough. They figured that would last for six months time.
It barely lasted 2 weeks.
This is why central economic planning doesn't work, and why shortages ran rampant throughout the Soviet Union and eastern communist countries. Simply put - Government politicians are no good at running an economy. They don't have the necessary skills.
Re:Did I miss something (Score:4, Insightful)
Since $4500 just about covers what a typical new car loses by being driven off of the lot, I'd say it makes someone buying a used car at least consider buying new this time around. If I had a $600 clunker sitting around, I might go for it even though I usually buy used.
Re:Proof Congresscritters are Economically Dense (Score:3, Insightful)
P.S.
And their mistake didn't just affect the government and a few carbuyers, but it's also affected the trillion-dollar car industry from Toyota to GM to Honda to Ford..... all of whom have developed and scheduled television advertising to run through November..... and suddenly all those spots are worthless.
That's called government inefficiency.
I just can't wait until that level of incompetence affects the health industry. Oh that's right - it already has via Medicare, Medicaid, and the govt-supplied health systems in Canada and Europe, where rationing based upon age ("sorry you're too old") is now common.
Re:Wow (Score:3, Insightful)
I think the concern in this recession is that rich folks would simply buy "safe" investments like treasuries with any tax cuts, which wouldn't stimulate anything.
Re:Clunkers is a clunker (Score:5, Insightful)
Why not give a tax credit to everyone who buys/owns a new vehicle that meets a certain MPG?
Because that only helps the urban young, poor, trendoid and childless, who are already in the democrats' pocket. This plan reaches out to those with families, middle class, and the sportsmen in rural and semi-rural America.
Wait... you didn't think this was about helping the environment, did you?
Re:What about the traded in cars? (Score:2, Insightful)
Re:Really seems to be working! (Score:3, Insightful)
To me, this program seems like a bad deal in general.
To begin with, many clunkers still run well and are paid off. My car is 10 years old (1998 Ford Contour) and I have no intention of getting a new one unless something happens to it. It's not the best looking car around (it has its share of dents) or the most powerful, but it works, is well-maintained, and gets me where I need to go. To me, it's not worth it to give up a car that is paid-off, runs well just to go into debt to buy a new car in a time where I should be working to get out of debt. You can argue about fuel efficiency, but new car payments would cost me much more. (I telecommute almost exclusively and don't do much back-and-forth driving) It just doesn't make much sense.
Re:Fuck you, this is about EVERYBODY (Score:3, Insightful)
Fuck yeah, man, America! Fuck libraries, fuck GameSpot, fuck buying used things, let's all do the patriotic thing and buy new, new, new! CONSUME CONSUME CONSUME!
"Fiscally conservative" is basically "colluding with big car companies to make more profits?" Guess what? When you buy old cars, you're also putting money back in another American's hands, and you're keeping a useful resource (a working vehicle) from just rotting away.
Re:Wow (Score:4, Insightful)
I think the concern in this recession is that rich folks would simply buy "safe" investments like treasuries with any tax cuts, which wouldn't stimulate anything.
Top bracket taxpayers are overwhelmingly small business owners paying their business taxes on their personal tax returns. Cutting taxes means more money to reinvest in small businesses that produce most new jobs in America and providing less discouragement for workaholic small business owners to keep working when they really don't have to. Yes, it's unfortunate that limousine liberals get the tax cuts too but they still help on balance (the cuts, not the liberals).
Since small business owners are overwhelmingly Republican and the UAW bankrolls the Democratic Party the "Cash for Clunkers" program made more political sense than tax cuts. Tax cuts also mean less government control over the economy and that would be double plus ungood.
Re:Fuck you, this is about EVERYBODY (Score:2, Insightful)
Don't worry about being an ass. That's a legitimate claim.
I don't see why the American government couldn't prevent this type of skirting of our laws. Ross Perot mentioned the "giant sucking sound", and while that might be applicable to Detroit, he really meant the migration of American jobs to lower-wage Mexican factories.
If we care about Americans, it behooves us to think about exactly the kind of anti-American job migration that you mention. If you're an ass, then, brother, we're both motherfucking asses.
Re:Clunkers is a clunker (Score:5, Insightful)
Then what I don't understand is that all of the car that are traded in, go straight to the car crusher.
To stimulate the streetsweeping and glassmaking markets, you have to go around breaking a lot of glass... [wikipedia.org]
We're destroying perfectly usable vehicles (usually trucks or SUVs). This is destruction of wealth, not stimulus.
Corporate executives are SOO much better right?! (Score:2, Insightful)
They estimated that $1 billion would be enough. They figured that would last for six months time.
It barely lasted 2 weeks.
This is why central economic planning doesn't work, and why shortages ran rampant throughout the Soviet Union and eastern communist countries. Simply put - Government politicians are no good at running an economy. They don't have the necessary skills.
I suppose all those executives at lehman brothers and AIG were so much better right?
and I suppose robber barrons, cartels, MAFIAA, and health insurance firms are providing so very well for the populace at large!
There is only one real difference between public and private management of the economy: The government is, at least mildly,ACCOUNTABLE.
Interest Free Loans to the Federal Government (Score:3, Insightful)
Re:Old news, Funds already tripled! (Score:2, Insightful)
Hate to put a damper on all the anti-government diatribes, but congress realized this form of vote buying has worked, and have been swift to see it continues.
There, fixed that for ya.
Re:Really seems to be working! (Score:2, Insightful)
Re:Fuck you, this is about EVERYBODY (Score:5, Insightful)
Buying a car is one of the most patriotic things you can do outside of buying a home
And if you can't afford either of those, the third-most patriotic thing you can do is smash some windows, because that puts money in the hands of the insurance claims processor, the workman who fixes the window, the glass manufacturers, and everyone that they buy from...
Re:Fuck you, this is about EVERYBODY (Score:1, Insightful)
You go for the laughs, but you aren't really making any serious point.
For the uninitiated [wikipedia.org]
Who is losing in this case? What is the waste? The old car that is destroying the environment, tearing up the roads, sucking up valuable oil resources? Good riddance, I say.
Re:Really seems to be working! (Score:5, Insightful)
You can argue about fuel efficiency
And you need to. How much fuel is required to build a new car, and to scrap an old one? What milage improvement do you need to get out of your new car for this to be a net improvement? It's not immediately clear to me that this program is factoring this into account. Unless you know how many miles a person drives per year, it's difficult to make this calculation. You also have to factor in future fuel efficiency improvements. If a car bought next year is more fuel efficient, but takes the same amount of fuel to manufacture, as one bought this year then waiting until next year to upgrade may result in less fuel being consumed in total.
Re:Really seems to be working! (Score:5, Insightful)
the fuel savings nationally should be measurable
That's only true if the cars being turned in were being driven a lot. If retired people are trading in old cars that were only being driven once a week to go to the grocery store, this isn't helping the environment at all. In fact, it is hurting the environment because of the resources that went into manufacturing a new car that was unnecessary. That is why I have always advocated a substantial gas tax -- it creates an incentive to get a fuel-efficient car where the incentive is proportional to the environmental damage (and national security threat of relying on oil from the Middle East) that is actually being done. Further, the people doing damage are the ones that pay a penalty for it. The Cash for Clunkers program is not well aligned with improving the environment, and it rewards people for damaging the environment (i.e. those that bought inefficient cars) at the expense of those that were more responsible, since they will be paying more in taxes in order to pay for the clunkers being traded in.
Go further into debt (Score:5, Insightful)
So this "stimulus" money:
Yes, this sounds like a brilliant idea to me.
And on the subject of "improving efficiency of the fleet" - look at the relatively low mileage targets the program has: they consider 26MPG highway to be an improvement? If they REALLY wanted to improve the fleet mileage, they would have insisted upon any car being purchase having at least 40MPG highway.
Sorry, this is just the "bread" part (with the ongoing MJ crap being the "circuses" part).
Re:Wow (Score:2, Insightful)
I think the concern in this recession is that rich folks would simply buy "safe" investments like treasuries with any tax cuts, which wouldn't stimulate anything.
Top bracket taxpayers are overwhelmingly small business owners paying their business taxes on their personal tax returns. Cutting taxes means more money to reinvest in small businesses that produce most new jobs in America and providing less discouragement for workaholic small business owners to keep working when they really don't have to. Yes, it's unfortunate that limousine liberals get the tax cuts too but they still help on balance (the cuts, not the liberals).
Since small business owners are overwhelmingly Republican and the UAW bankrolls the Democratic Party the "Cash for Clunkers" program made more political sense than tax cuts. Tax cuts also mean less government control over the economy and that would be double plus ungood.
This is the same, tired, republico-libertarian snow-job.
my entire family owns small businesses and this is NOT how it works.
Properly managed businesses are incorporated, meaning they are protected by the same tax law as the giants everyone loves to vilify.
As such, whenever taxes threaten their personal income, they just keep the money in their business and claim less income, even though they earn the same in their net worth through re-investment in their business.
In other words, RAISING taxes, not lowering them, encourages small business owners to re-invest in their business rather than claim more income and hoard money in personal investments.
Yeah, a great way to revive the economy (Score:5, Insightful)
What a great way to fix a recession caused by people who got into too much debt buying houses they could not afford! Let's make them get rid of their cars and buy new ones for more debt! Credit is the fuel on which the economy runs, you know. If these people stop spending, then by golly, we need to give them more money so that they can KEEP spending DAMMIT!
Re:Corporate executives are SOO much better right? (Score:5, Insightful)
There is only one real difference between public and private management of the economy: The government is, at least mildly,ACCOUNTABLE.
Really? We should not forget where the current economic meltdown began. Congress, particularly one committee in the House, regulated and looked out for the interests of the nation monitoring the financial health of Fannie and Freddie Mac. Chris Dodd and Barney Frank, both high ranking members of that committeereceived the most political money from Fannie Mae and Fannie Mac over the past 10 years (Obama was in the top 3 as well [quite the coup for someone who has not been in politics that long]). Their failed oversight may have gotten Dodd a sweetheart deal on his home loan, but the rest of us? We get the to pay for the bailout. Those two knuckleheads are still on Congress.
When a company fails, it fails a percentage of the people. When government fails, it fails all of the people.
Accountability in government is a shell game.
Re: bike? :) (Score:2, Insightful)
Yeah, I think we really need to make gas more expensive. It's taxed to cover the roads, but I think it should also be taxed to cover much of our military spending as well... especially since it seems that our military is primarily used to protect our petroleum supplies these days.
We have to do something to reverse the trend of so-called "urban planners" to put such emphasis on automobiles. We are looking to move, and by far the easiest way for my wife and I to get an apartment between our two jobs and drive in. For my wife, public transit might be an option except the neighborhood is so shitty - but for me, public transit would be a nightmare involving two trains and a bus... all to save a 15-minute drive.
Re:Fuck you, this is about EVERYBODY (Score:5, Insightful)
Re:Old news, Funds already tripled! (Score:1, Insightful)
Hate to put a damper on all the anti-government diatribes, but congress realized this form of stimulus has worked, and have been swift to see it continues.
Wow! What if every program they proposed had to have its funding tripled? That would be awful.
Re:Did I miss something (Score:3, Insightful)
Or, more likely, people who were already considering a purchase are just moving it up a bit to grab the government handouts. If you don't need or want a new car, $3500-4500 won't change that. If you do need or want a new car $3500-$4500 will not hold you back.
I'll admit there may be a very small percentage who will swing from the first group to the second because of the extra money, but mostly this is a bald give away to people who don't really need it. Is it popular with those people? Of course. But it is bad news and more debt for everyone else.
The government should stop this nonsense now.
Re:Old news, Funds already tripled! (Score:3, Insightful)
Hate to put a damper on all the anti-government diatribes, but congress realized this form of stimulus has worked, and have been swift to see it continues.
By saying "worked", what do you mean? It certainly has generated business for government owned businesses, GM and Chrysler. It has generated economic activity which might satisfy the less discerning Keynesians who don't care about the broken window fallacy. But I doubt it'll lower carbon emissions for the US.
Re:Fuck you, this is about EVERYBODY (Score:5, Insightful)
Your argument is a form of the broken window theory. If someone can fulfill their transportation needs by buying a used car vs a new car then the economy will be better off if they buy the used car. Why? Because in such a situation buying a new car is wasteful - some of those people you mentioned - salespeople, managers, workers, etc - could be allocated to generating other resources that actually are in demand and ultimately that will generate more wealth and utility for society.
So yeah, buy a used car if you want to save money
Again, that saved money can be spent on other goods and services which benefit also benefits the American public.
Re:Corporate executives are SOO much better right? (Score:5, Insightful)
The reality is quite the opposite.
Without government bailouts, the worst a private company can do is to piss away their own money (and that of their clients who have hopefully done their risk-management homework) and go out of business.
When the government screws up, you pay them a trillion dollars at gunpoint so they can try it again.
Re:Best of a bad idea (Score:3, Insightful)
Right. That's why the best thing for the economy is for all the money to be stuffed into mattresses, so it doesn't circulate at all.
Oh, wait, no, that's not right. It's the other thing, you know, dead wrong economically. Velocity of money is important and when you're in a credit crunch (which we still are), one key thing is to keep the money moving. It's a lot like oil in an engine. If you "save" all the oil in the pan, the engine locks up and destroys itself.
Re:Corporate executives are SOO much better right? (Score:5, Insightful)
Uhhh... are you living in the same country as the rest of us? When corporate heads screw up, they leave the company with tremendous "golden parachute" severance deals, then go on to be hired by some other company at even higher compensation. They most certainly do not end up suffering the way free-market zealots say they should.
Re:Clunkers is a clunker (Score:3, Insightful)
Not only is it for a group of people that have older cars. But it rewards those who were too irresponsible to buy "fuel efficient" cars to begin with.
...
It just seems like this bill rewards those who are rich and were environmentally irresponsible over the last 10 years.
It only seems like that if you completely ignore the very first thing you said: people that have older cars
Congress understood that there would be unintended benefits to people they did not want to give it to.
The program is designed to get fuel inefficient cars off the road.
Not to reward the rich and environmentally irresponsible,
not to subsidize cars for lower income Americans,
only to get fuel inefficient cars off the road.
If you want a real laugh, the gov't did not mandate higher MPG requirements because it would disproportionately favor foreign manufacturers. How's that for rewarding American mfgs who've been environmentally irresponsible over the last 10 years?
Then what I don't understand is that all of the car that are traded in, go straight to the car crusher. What about all of the families that are in need of a decent affordable car, but cannot afford to buy a brand new one?
The program is designed to get fuel inefficient cars off the road.
Not to move a generation of fuel inefficient cars from one set of hands to another.
Why not give a tax credit to everyone who buys/owns a new vehicle that meets a certain MPG?
They thought about that. The cash for clunkers goes straight from the gov't to the dealer and counts as cash so that buyers can get a lower interest rate by not financing as much debt from the dealership.
Giving away taxpayer money causes inflation. (Score:5, Insightful)
Giving away taxpayer money causes inflation. The inflation is not only in the dollar generally, but also in the price of new cars. Those who focus on the free taxpayer money they are getting may not realize that the dealer has raised prices.
To me, the "Cash for Clunkers" program seems like government corruption. General Motors failed because of consistent bad management [wallstats.com], in which most of its cars were rated poorly by Consumer Reports.
Now taxpayer money is being used to support bad management, and the taxpayer money goes to support people who have enough money that buying a new car is a goal, instead of finding a job, or getting through university.
The U.S. government has no money. In the entire history of the world, it is the entity most deeply in debt [brillig.com].
I've discovered that U.S. citizens do not want to believe that their government is corrupt. When they are presented with evidence of corruption, most avoid awareness.
Re:Proof Congresscritters are Economically Dense (Score:5, Insightful)
I'd like to see you back up the claim that people are regularly denied healthcare because they're too old in Europe. You make it sound like we put them out to the wolves, if we can find them a cheap enough bus ride out to the forest.
But even if we accept that you're right for the sake of argument, if you're going to deny someone healthcare, it's better to do it because the treatment would help very little, cost a lot and the resources could be better used on someone else, than to deny it because how treatment affects your corporate bottom line and shareholder profit margins.
Also, I'm having trouble envisioning an insurance company who would cut off health care for a young person for some bullshit reason, that would still magnanimously spend millions on adding a few months to an old person's life. But maybe I'm wrong and insurance companies suddenly like to spend a lot of cash on someone who has very few payments left to make. In that case, I'd have to apologize, but I'll hold off on writing my apology just yet.
Re:Sorry (Score:5, Insightful)
No, Medicaid covers that particular case. More often, the problem is "Sorry, you're not poor enough"....
Everyone Did (Score:4, Insightful)
Nobody is buying a car "just because" of this. The truth is that this recession has been driven by two things. The primary factor is that people panicked. EVERYONE freaked out, THE SKY IS FALLING. The second factor is simply a side effect of the first one, banks backed off on giving credit, even to people who were low-risk.
The cash for clunkers program is enough to get both groups to calm down and face reality. People have a lot of money, they just aren't spending it. Banks have money, they just aren't giving credit to low-risk people.
A lot of fuckups made everyone gun shy towards dealing with the safe bets that drive our economy. Cash for clunkers put just enough money into the groups that are panicked to calm them down.
Re:Clunkers is a clunker (Score:3, Insightful)
Re:Did I miss something (Score:1, Insightful)
1987 Plymouth's are banned from sale except as a older used car?
Well, the last time I seen a 1987 Plymouth for sale as anything OTHER than a used car was 1987....
Re:Fuck you, this is about EVERYBODY (Score:3, Insightful)
When you buy old cars, you're also putting money back in another American's hands, and you're keeping a useful resource (a working vehicle) from just rotting away.
Bu... but.... the car company weasels need your money _MUCH_ more than other Americans do!! How else are the big car companies going to pay off the consequences of the last few of decades worth of really lousy business decisions like colossal over investment in SUV production if not with massive injections of taxpayer money? Why, if we don't do as the industry lobbyists are saying and feed the big car companies lots of tax dollars actually intended for more socially beneficial projects, car companies might actually have to get off their ass and come up with some original ideas. Like designing and manufacturing more fuel efficient vehicles and selling them to the public _WITHOUT_ government subsidies. Oh the horror, the horror....
Re:Not sure if it is stimulating the US car market (Score:5, Insightful)
I do find it comical that this is being floated as a stimulus plan when it seems to be going to foreign car companies.
What is a "foreign car company"? If you mean "a car company that is foreign", consider that the shareholders live worldwide. If you mean "a company that makes foreign cars", consider that a lot of Honda, Toyota, Subaru, and the like have plants in the United States. Is a Toyota built in Ohio by American workers who pay U.S. income tax more "foreign" than a Ford built in Mexico?
Re:Proof Congresscritters are Economically Dense (Score:4, Insightful)
What you just described sounds like 1930s Corporatist Germany or Italy (small group of leaders; a supreme leader; integration between government and business).
No.
What I had in mind was the government which existed pre-Federal Reserve (pre-1910) which did not try to control the economy, but instead allowed people to move-about freely without restriction. *I* know how to run *my* store better than some Congressman whose only qualifications are speaking well and scoring lots of votes and has no business acument whatsoever.
Let the People run the businesses, and let Congress keep hands-off.
Re:Fuck you, this is about EVERYBODY (Score:5, Insightful)
You must be new here. Lowering taxes gives the government less influence over those who vote for them.
Re:Yeah, a great way to revive the economy (Score:3, Insightful)
ah, but in America the single largest debt the vast majority of Americans will ever hold, their home, is exempt from bankruptcy
Re:Go further into debt (Score:3, Insightful)
Re:Really seems to be working! (Score:3, Insightful)
The plan is primarily designed to stimulate the auto-industry, not save on fuel. The plan has two effects. A new car is purchased, and an old car is crushed. By taking an old car off the market it creates a shortage in the used car market for cars. This will likely raise the price of used cars, and make buying new cars more attractive.
The fuel economy part is really just a way to sell it and get it passed. It might not have a huge impact on lowering oil consumption as people might just drive more because it's cheaper and they now have a new more reliable car.
Re:Clunkers is a clunker (Score:1, Insightful)
If you went out and bought a hummer, and now you want to replace it 5 years later, you were fiscally irresponsible, but you had the money. The cash for clunkers program wasnt the reason you bought a new car, it was just an incentive.
The environmental impact is bullshit. Everyone knows it. If you don't, allow me to inform you. Less than 3% of carbon dioxide in our atmosphere is man made. No matter how bad your fuel economy and how much you drive, if the entire US only drove stretch hummers, there would be an immaterial environmental impact.
The point of the program is 2 fold:
1) Help out car dealerships to get rid of stock
2) Help people who wanted to get a new car but couldnt because $100 a month on car payments was the difference in keeping a 20 year old car and buying a decent one to buy a decent one.
The first point has been a massive, and ultimately short term success. In 3 months, no one will be buying cars again. On point 2, a lot of people are trading in 07 fords for 10 fords, gaining 4 MPG, and increasing their debt (the 07 fords are beat up enough that they wouldnt already get a 4500 trade in).
The car crushers only get $50 per car to do the crushing under the plan. I'm guessing that a lot of dealerships are paying upwards of 1000 for car crushers to fill out the paperwork, buy a $500 car from a used dealer, and let the dealers sell the clunkers to poor people anyway. After all, if you can sell 25k retail cars for 15k thanks to a government program, you might not care that the trade in cant be resold. But if your profit margin on the 25k car was less than 50%, you might be influenced to make some side deals. Or you might just want more money that can't be traced because the VIN is "missing."
The families that are in need of a decent affordable car take out loans to buy one. The ones who don't need a car, but want one, move to cities that have public transportation, or at least within biking distance to work, or they sit at home and collect unemployment until they can afford a downpayment, and then they move. People dont stop buying groceries to make the car payment.
This government program (which is not a bill, because its already out of money, so I assume it was passed) doesn't reward the rich. It just punishes future generations. Watch your tax bill over the past 50 years (ask your parents/grandparents if you aren't that old, I know I'm not). Now watch it over the next 10. I'm guessing the war in Iraq is going to be much less of an issue than the economic stimulus/healthcare reform/social security/beers at the white house to fight racism bill for those of us who pay taxes.
Re:Did I miss something (Score:5, Insightful)
I'd say you missed a lot. First of all, ever since I can remember, and right up until this second, businesses are allowed to write off any car they buy as an expense. So congratulations on having fully swallowed the anti-Bush Kool-Ade.
Second, the reason that you can't buy a 1987 Plymouth as a new car is because they kinda stopped making them in, oh, I'd say about 1987. There as never a ban on selling them new. If there was, you'd hardly be able to get a use one now, would you. And also, the 1987 Plymouth Colt got 21/26 MPG, ever so slight worse than the 1987 Honda Accord (21/27).
Democrats get elected by convincing everybody they're different from the Republicans. Less corrupt, anti big-business, yada yada yada. But it only takes a few months for people to realize that all they've done is elect the same guys, but with higher taxes.
Re:Did I miss something (Score:3, Insightful)
Re:Proof Congresscritters are Economically Dense (Score:5, Insightful)
Bullshit.
Compare the middle class standard of living to 40 years ago. If middle class people today were making what they make but willing to live like they were a few decades back, they'd be flush with cash. But instead, they have larger houses, multiple vehicles, magic wireless communications devices for everyone in the house, miraculous high speed access to an undreamt of trove of online information and entertainment, giant flatscreen TVs in more than one room, regular sips of designer coffee drinks, fresh out-of-season produce in an embarassment of varieties... need I go on? These are considered normal, every day things. Your 1950 economic dream household lived like paupers by comparison.
The problem isn't income (adjusted or otherwise), it's the expectation of having (and being entitled to have) things/services/experiences that are wildly beyond what someone in the middle class would have previously enjoyed. You know, like... central air conditioning. Or living past 80.
That is not "remaining stagnant," it's "spending every dollar you can get on new creature comforts that never before existed, livin like a king compared to the middle class of only a generation or two ago, and then complaining that you don't have enough cash left over to really live like a king compared to how you're living just this minute."
Citation please (Score:3, Insightful)
Building a new car burns-up the equivalent of 50,000 miles worth of gasoline (2000 gallons).
I'm of the opinion that this program is your traditional governmental stupidity. Take tax payer dollers and waste them on subsidizing peoples bad habits instead of trying to actualy force improvement. Think of what these billions of dollars could do for public transportation. However, I lack sufficient justification to make a strong case. If you've got something other than your memory to back up those numbers I'd love to see it.
Re:Did I miss something (Score:3, Insightful)
but I'm not eligible due to a stupid law.
This pretty well sums up the entire program. It looks like more of an Obama government PR stunt, being able to claim "hey, we paid $4,500 of your new ride!". Of course it will have little real benefit in the long term, just as Bush's stimulus check to every house didn't make an ounce of difference. And hell, I voted for the man (although buyer's remorse has long ago kicked in).
And honestly, the fact you can even buy an SUV or light truck with this money is insane. A 2 mpg increase is nearly statistically insignificant, and one or two extra MPG on a 30 gallon tank is 30 or 60 miles. You're still using a lot more gas (and petroleum) to get you, your spouse and your 2.2 kids around town than you would with a nice Camry. Hey Obama government, if you want to use tax dollars to fund our automobile addiction, at least try to legislate some morality into it. The soccer mom SUV is a pinnacle of the self-centered, sedentary American lifestyle.
Somebody please... (Score:5, Insightful)
If these cars were going toward recycling it would be one thing, but destroying many of the perfectly good parts just to prevent it being sold as a used car later on is incredibly wasteful.
Re:Did I miss something (Score:3, Insightful)
Oh come on! Who wouldn't want to make their car landfill prematurely and stunt renewable energy development at the same time?
Re:Did I miss something (Score:5, Insightful)
It's designed to get inefficient cars off the road and to stimulate the auto industry and all of the companies in that employment chain.
The second two points are true. The first point is just window dressing. The program only gets the second-tier polluters driven by well-to-do middle class people off the road. The third tier polluters, the serious beaters driven by people who can't afford a new car at all, not even with a $4500 incentive, those cars will just stay on the road longer. The government is basically reducing the supply of relatively safe, relatively non-polluting vehicles to the lower classes--- what my wife likes to call the "No Airbags for Mexicans" program. Pollution reduction is just a candy coating to get people to swallow what is actually a gigantic handout to a grossly mismanaged industry.
Re:Destruction of the second-hand car market ... (Score:3, Insightful)
Its the No Airbags for Mexicans Program
Re:Did I miss something (Score:2, Insightful)
Re:Fuck you, this is about EVERYBODY (Score:2, Insightful)
You can't do this though without changing not just the taxes, but the price of everything to match the lowest common denominator (that being the country that can produce product the cheapest). If Mexico can pay people $2/hr to build a car, try paying that to Americans when the cost of a house is $200k+. Even renting an apartment would be out of their financial reach. The workers won't be able to afford anything.
I don't foresee corporate globalization changing direction any time soon. You'll find that America's standard of living will drop, while other countries will see theirs rise, until some sort of equilibrium is reached.
Of course at that point you'll have One World Government, One World Currency, and the dreams of the NWO will be achieved.
Re:Did I miss something (Score:2, Insightful)
If I had an old 17mpg pickup I would be allowed to get a 19mpg SUV and get the free congressional money...
Wait. There's free congressional money? I think you mean free taxpayer money. But even that statement is false. You see, that $4500 comes from me and you and your neighbor and the guy next to him---and all of our children. It is not free. This is the problem with all of these congressional expenditures. They're spending your money and claiming to be helping you. The President and the Congress are so arrogant (as they have been for decades) to believe that they know better how to spend your money. America ceased to be truly free when America allowed its leaders to determine how the taxpayers should spend their own money.
Repeat after me: "There's no freedom without economic freedom...there's no freedom without economic freedom...there's no freedom without economic freedom..."
Re:Somebody please... (Score:3, Insightful)
The junkyard gets the car and has to give the dealership $50... beyond that, they have to crush the car... but I imagine most junkyards will still take any parts they find viable. The biggest problem is that junkyards just don't keep parts anymore. Since scrap metal became more valuable, any car more than, say 5 years old, was crushed for the steel. It's not because of this program... just the way junkyards have gone.
Re:Did I miss something (Score:2, Insightful)
I only watched the Aurora video, but that was just tragic. That car looked almost brand new and they just trashed it without a care in the world.
Now, I'm not some Greenpeace eco-freak who bombs oil tankers, but that is exactly the kind of shit that is going to bring about our destruction. We live on a planet with limited resources and here we are, wasting them instead of valuing them.
Reminds me of the newsclip on The Simpsons where they introduce "New fad: wasting food!" and show somebody dumping a plate of freshly cooked, untouched chicken into the trash.
Re:Everyone Did (Score:1, Insightful)
What's driving the recession is that the amount of debt in the economy
What's "driving" the recession is more than a single factor. But to talk about the amount of debt in the economy, you need to talk about the amount of credit out there in the first place. And what caused that: Fed policy of low interest rates encouraged borrowing and easy credit and consequently stimulated several bubbles, a policy of unprecedented deregulation in the modern world, and poor enforcement of those few regulations that were left, mortgage-backed derivatives and other fancy-pants financial instruments-- credit default swaps, etc, an atmosphere of "trust the system" so lax that Bernie Madoff could steal billions without anyone noticing... shall I go on?
As for this particular "cash for clunkers" program, all it's doing is pulling forward demand for new vehicles. It will cause a short-term rise in demand now, but once the program expires or runs out of cash again, that demand will vanish and there will be nothing to replace it. Sales will have to return to their previous level or even go lower, as the people who buy new cars under this program certainly won't need to do so again for a few years.
A few things:
1. This assumes that there is no built up demand from the last 2 years. Which is obviously not true. Future demand is not being "pulled forward", old demand is also being "pulled back". Second, there is a massive demand gap in our economy NOW. In a few years, if the economy is recovered, it may not be an issue-- in fact, if we find ourselves with an inflation problem, we won't want so much demand- we'll want to slow the economy back down and pull money out of the system. But right now the problem is demand and lack of sales.
2. The average American's debt load is going in the right direction as a result of this crisis. People are now saving something of their income, for the first time in a decade. Hopefully, this change in behavior will last past the crisis, but at the moment is contributing to the demand problem due to the paradox of thrift [wikipedia.org] -- what's good for the economy is bad for your personal bank account, and vice-versa.
3. You are blaming everything on excessive debt. But aside from the fact that this debt was encouraged by the Fed and a credit industry that effectively controlled much of the government, you are ignoring as significant causes for the crisis-- lack of effective regulation, unchecked greed on Wall Street, perverse incentives for too-big-to-fail corporations to take insane risks and over-leverage, etc. Consumer debt is a small part of of the problem, and more a symptom than a cause.
4. Programs like CfC and the stimulus package are the solution to this crisis, as time is bearing out. Unfortunately more debt is the price we have to pay, but it is a necessary evil. As opposed to the more recent reasons we went into debt (say, a completely unecessary war), this one is paying off in the long run. The alternative is an economy in the toilet.
So while I agree with you about debt as a part of the problem, I think you're misrepresenting it as the entire issue, which it isn't.
Re:Somebody please... (Score:3, Insightful)
I don't know anything about the junkyards not selling parts anymore. I've purchased parts for my 20 year old pickup truck from junkyards several times in the last 5 years.
Re:irresponsible? (Score:3, Insightful)
18, 30.. really makes no difference. None are 'irresponsible' as it was put.
But if you want to live in a socialist world, where you are told what to buy so you can feel good, go right ahead, just don't do it around me.
Comment removed (Score:4, Insightful)
Re:Giving away taxpayer money causes inflation. (Score:3, Insightful)
The US debt is a double edged sword. It could sink our economy, but the more people we owe money to, the more interest they have in preventing a total economic collapse. Swift inflation would make outstanding US debts meaningless and swift deflation would prevent any payback in a reasonable time frame.
In effect, our colossal debt encourages our foreign creditors to be more forgiving. There are laws and guidance on insolvency for international corporations(UNCITRAL) but nothing for insolvent countries.
Re:Proof Congresscritters are Economically Dense (Score:5, Insightful)
livin like a king compared to the middle class of only a generation or two ago,
When you look at it empirically, we live better than even kings did 100 years ago. I daresay that even being poor in the US is measurably better than being lower middle class in some parts of the world. The "poor" in the us often have automobiles, several changes of clothes, and they all seem to have televisions.... drive through a bad neighborhood in south los angeles and I challenge you to find more than the occasional house that doesn't have a satellite dish on the roof. The standard of living here in the US is an embarrassment of riches compared to how people live in (say) Bangladesh.
We subsidized same SUVs we're trashing now (Score:3, Insightful)
6 or 7 years ago congress passed a tax bill, as proposed in President Bush's economic stimulus plan, that offered a $100,000 tax credit for business owners who purchase large vehicles.
Not all these vehicles purchase with with huge tax payers subsidy, can now be replaced with help from tax payers.
Both programs were bad ideas. The growth of the SUV market was largely due to these hand-outs. It also perverted the market and may be partially to blame for our auto industry failure.
Re:Giving away taxpayer money causes inflation. (Score:4, Insightful)
I think the part you're missing is the reason for the move from gold (or silver) backed currency to fiat currency. The reason wasn't because the "supply of goods and services outstripped the availability of money"; the reason was the boom-and-bust cycle. The idea was that by manipulating the money supply, the Federal Reserve would be able to soften and smooth the boom-and-bust cycle, making the "busts" much less severe. (It's no coincidence that the Federal Reserve was created shortly after the Panic of 1907, and subsequent reforms have happened after every "bust" since then [like the Great Depression].)
Now, there is no small debate about whether this manipulation of the money supply has actually done anything at all to quell the boom-and-bust cycle. Some have suggested that these boom-and-busts are inevitable, and by delaying when they happen through manipulation of the money supply, it simply makes the inevitable bust that much worse. (Personally I think it is possible to smooth out the bumps, but that requires minimizing the economic good times as well, which I think historically hasn't been a very popular Federal policy.)
Of course, there are also others who assert that the purported reason for fiat currency is a lie, and that the real reason behind fiat currency is to "print money" on demand, inflating the currency and enabling the government to pocket the difference--but when you look at the amount of revenue gained by "printing money" compared to the usual methods governments have of raising revenue (plain old-fashioned taxes), it seems unlikely that this is anything but a fringe benefit of fiat currency. In any case, I don't think there's any debate about at least the purported reason for the Federal Reserve and fiat money.
Re:Did I miss something (Score:3, Insightful)
Now you are discussing the program itself... I don't support subsidizing anyone's vehicle at all :)
I wasn't defending the program really, it's really just a big fancy welfare program.
Re:Did I miss something (Score:3, Insightful)
The whole program is silly. Just tax gasoline if you want to drive fuel economy up. Give a tax gas rebate to people earning under a certain amount so that people don't yell about burdening the poor.
Re:Giving away taxpayer money causes inflation. (Score:3, Insightful)
The problem with money (and share stock) is that:
1) It does not distinquish between intangible resources (such as data) and resources hard physical limits
This is both a strength and a weakness. Being able to assign worth to intangibles is good because it encourages people to produce them. Being unable to reflect the physical world (resources) and equating the two is bad.
2) It takes time for supply and demand (plus regulation) to push prices up to accurately reflect the disappearance/scarcity of an important resource (even resources that we all collectively rely on for our survival such as air and water). In money very poorly reflects the intangible worth of very rare things.
One manifestation of this: Think about the number of species that have been hunted to extinction due to their worth. As the animal becomes rarer the price gets higher. Pretty soon all your Tigers have been converted into Tiger penis soup by poachers. Money does not capture the intagible worth of the species.
Wish I knew a better system. I don't. Any system that assigns worth is going to have flaws. Any system that measures the intagible risks failure to reflect reailty, but you need to be able to trade between the two, because people who produce intangible things still need tangible things like food, water and shelter (not to mention their wants).
Re:Did I miss something (Score:2, Insightful)
Republican bitching about GM is a total fraud. (Score:3, Insightful)
Republican bitching about GM is a total fraud.I keep hearing so-called conservatives moan about GM and the how the government shouldn't have bailed them out. They talk up the free market as if they believe in it and the truth is, they don't. The very same conservative movement that rips the northern based GM has absolutely no problem lining up to the government dole when it comes to protectionism for American food products and subsidies for American farmers. Jeff Sessions, Republican, publicly ripped GM so much, and defended Honda and Toyota so much, that, I went and made a Japanese style state flag for his home state of Alabama....:
http://www.treatyist.com/issue1/alabamasnewflag.aspx [treatyist.com]
Pretty much, Republicans have movie stars doing "Got Milk" advertisement, "Beef, its what's for dinner...".. like, the USA needs to have the government advertising fucking food. Every year American farmers get the same out of amount money that GM gets, in either direct subsidies or benefits from protectionism, and THAT, of course, based on most conservatives that I talked too, is somehow "different."
Moral of the story is this, Republicans have no credibility on balanced budgets, no credibility on economic national security, and no credibility on nationalism in general. If the GOP wants to regain its self respect, then red states must balance their budgets, and get off the federal dole themselves.
Except that Gold is Fiat (Score:5, Insightful)
- Now today that same suit still costs about quarter-ounce of gold, but 300 dollars paper money.
Except that, these days, a person would have multiple suits, all sorts of clothes, a couple of cars, more food than you can possibly eat, houses that are quite frankly beyond anything all but the richest in the 1920s could have dreamed of, video games, air conditioning, TV, and more.
Because of this, you could make the argument that the 300 paper dollars is worth far more than the 5 paper dollars was in the 1920s.
All of that was made possible because when you have fractional reserve lending, you create pools of money that can be invested in the creation of new products. If we had to wait for someone to dig up gold, we'd be worthless.
What goldbugs never fail to appreciate, is that gold doesn't have anymore "natural" value than paper money. Gold's supposed value is just as much fiat as paper money is. Whether you declare your money to be based on gold, based on paper, based on apples, or oranges, or an entire economy, money is always going to be fiat. The only non-fiat money this country had was the bank notes of the late 19th century and that turned out to be a disaster.
What the hell is gold actually good for? At least a dollar can help me light a fire or wipe my ass with it. Can't do that with gold. Gold's a terrible metal to make stuff with.. its too soft. All it is kinda shiny. But who cares about a kinda shiny rock when you have LCD screens that shine way more.
Re:Did I miss something (Score:1, Insightful)
Numbers back that up. According to this guy's link [bbc.co.uk] we would be ALMOST OUT OF DEBT BY NOW if Clinton's surplusses had been allowed to happen.
Instead you got Bush's $1T tax cut, his expensive wars, his second tax cut (Remember, we are still in debt), his economic collapse and stimulus (TARP).
I wouldn't have bothered, except this guy got +5 and no responses. Outrageous.
Re:Did I miss something (Score:3, Insightful)
Interesting that, in your world, SUVs, Mercedes, and BMWs are the same car.
Doubly interesting that the driving of such vehicles makes one a "socialite". Look up the word. It doesn't describe anybody I know.
Triply interesting that you think that you can refute a perceived trend merely by pointing to yourself as a counterexample.