Do you Support "Cash For Clunkers"?

[Fmr. Pres. Duke]

I see this as creating another mini lending crisis down the line. Think about it:

1. Poor people trade in their trashy cars for $4500.
2. They use that money as the down payment for cars that will be financed through some sort of lender.
3. They make the initial payments, but then it turns out they cannot afford to keep making them on their new car.
4. The government begins having to repossess all these new cars that the poor people could not afford in the first place and were only given because the government essentially payed their down payment.

Sure, it may be a good idea, but in the long term it's going to cause problems.

[Fmr. Pres. Duke]

I bet all those small auto shops that are trying to make a living will be thrilled with the program.

They actually did run a story on that on the local news with a man who said his business was already dropping off after this program was put into place. He said a customer that had been coming to him for twenty years told him he was finally going to cash in his car for a new one. This is one of the negative side effects to this program.

[Fmr. Pres. Duke]

Short term it is fine. But what will this lead to down the road? The housing boom was great too in the short term, but it certainly ravaged our economy long term. I hope we aren't bailing out car lenders next because these people buying new cars now cannot afford to make their auto payments. It's a never ending cycle.