I don’t know whether the Cash for Clunkers program was worthwhile or not. My friend gmart just posted on facebook about an Edmunds.com analysis of it. Obama’s White House fired back immediately denouncing their report as faulty.
What I do know is that I bought a Honda Civic in 2002. It has over 120,000 miles on it, but still gets over 30 miles to the gallon in the city and up to 40 mpg on the highway, and this car is not a hybrid. Obviously, it wasn’t eligible for the Clunkers program, even though we could certainly have sold it and bought a new car (like our Pilot) and gotten more money than we otherwise could have (it is worth maybe $3,500 now).
The economically and environmentally responsible decision I made to buy a Civic 7 years ago is not rewarded, but buying a guzzler that is creeping along on its last legs is generously rewarded by the government. I know, I know, I’m about 3 months late to this discussion, but it seems a backward way of running things.
Did you trade your car in through the clunkers program? What do you think of it?
The clunkers program didn’t help anyone here and not because no one had a gas guzzling clunker. My son’s car certainly fits that’s description (1989 Mercury Grand Marquis – probably doesn’t ever get more than 15 mpg), but despite the fact that it’s a true clunker, it was too old to qualify. Our other cars (like your Honda) got mileage that was too good when they were new, so they didn’t qualify either. As a matter of fact no one that we knew who drove a true (on its last legs) clunker qualified for the cash. It looks like you had to be one of those soccer moms who was driving an SUV (which most of us couldn’t afford in the first place) in order to qualify for the program. It probably helped the car industry, it may have helped the environment somewhat, but it sure didn’t help most of us who’ve always driven second hand cars into the ground.
Ah, you’re missing the point of the program. It wasn’t an environmental program, or a program to ease consumers of high gasoline prices. That program was designed to stimulate the economy by: redistributing wealth (aka tax dollars), and getting consumers to spend money.
Keynesian economics demand that the government spend money to stimulate the economy… it doesn’t require that the government spend it on productive or useful activities.
Oh, what we could have done with that billion dollars…
I do think it backfired on them slightly, in that most of the money went to foreign automakers. Oops.
What I find silly about the program was that all the cars had to be destroyed as they were traded in to the program. While I understand that the intent was to get some of these old cars off the road entirely, I’m sure that there were some that could have been resold to help folks who would like to buy a used car in these tough times (even with higher gas usage, a cheap used car can easily be the better choice as a new efficient car will still take several years to break even financially).
While helping the environment is good, I don’t think it should be the sole focus especially when people have immediate needs.