Do you Support "Cash For Clunkers"?

[JerryBrown2010]

Do you Support "Cash For Clunkers"?

[Swing low, sweet chariot. Comin' for to carry me home.]

mixed emotions...short-term, it's a good idea....mid to long-term, I think it is a dumb program

it's dumb to scrap the cars, they should at least part them out.

they should have used the money to move us away from gasoline - like giving incentives to switch to electric or convert to natural gas.

[DownWithTheLeft]

The idea is good, but like most gov't programs the logistics aren't there

How much are we helping the environment if you can trade in a 16 MPG car and get an 18 MPG Hummer?

[afleitch]

I hate to say it, but a similar measure in the UK has given the care sales market a bigger than expected boost.

[opebo]

I would love to hate it because it destroys that which I like - old things - but I think it mostly gets rid of things like old Tauruses and Camrys that I wouldn't be interested in anyway.  By now all the old 'real cars' are collectors items anyway, so it doesn't really effect them.

So, I support it.

[Sam Spade]

Think about the unintended and long-term consequences for a sec, and your answer would obviously be no.

But since the US government is now running a car company, I can understand why it's being done.

As I've noted before, these games continue until they don't and I don't want to be around when they do.

[Silent Hunter]

The idea is good, but like most gov't programs the logistics aren't there

How much are we helping the environment if you can trade in a 16 MPG car and get an 18 MPG Hummer?

Every little counts. Especially if the Hummer has airbags.

[Marokai Backbeat]

Yes, of course. Vastly successful and doesn't cost that much.

Think about the unintended and long-term consequences for a sec, and your answer would obviously be no.

Oh, well, that convinces me. Thanks for the detail.

The idea is good, but like most gov't programs the logistics aren't there

How much are we helping the environment if you can trade in a 16 MPG car and get an 18 MPG Hummer?

It's cute how you apparently know absolutely nothing about the requirements of the program.

[Lief 🗽]

Strongly support.

[JSojourner]

Strongly support.

[Sam Spade]

Think about the unintended and long-term consequences for a sec, and your answer would obviously be no.

Oh, well, that convinces me. Thanks for the detail.

Pretty sure I posted it before, and I'll post it again if need be.

1) Pulls forward demand from the future, so when the subsidy ends, guess what will happen to the demand - it'll go below the long-term trendline in the future (whatever that number is - it's presently unsettled, I'll guess 10 million units a year, but that may be an overshoot).
2) Creates a debt trap for consumers.  Your $4500 must be used to purchase a new car, which undoubtedly will be financed.
3) Impacts the used car industry very negatively (I'm already hearing plenty of anecdotal reports) and the scrap metal dealers because they destroy the engines (which are the most valuable part of the car, by far).
4) Interestingly, the cars that will be purchased from the car dealers have less profit-margin than other cars being made.

Need I go further.

[True Federalist (진정한 연방 주의자)]

The idea is good, but like most gov't programs the logistics aren't there

How much are we helping the environment if you can trade in a 16 MPG car and get an 18 MPG Hummer?

It's cute how you apparently know absolutely nothing about the requirements of the program.

There is a kernel of truth here.  It is possible to get the maximum $4500 credit with only a 2MPG difference between old and new vehicles, but both need to be class 2 trucks.

[War on Want]

Strongly support.

[Mint]

Think about the unintended and long-term consequences for a sec, and your answer would obviously be no.

Oh, well, that convinces me. Thanks for the detail.

Pretty sure I posted it before, and I'll post it again if need be.

1) Pulls forward demand from the future, so when the subsidy ends, guess what will happen to the demand - it'll go below the long-term trendline in the future (whatever that number is - it's presently unsettled, I'll guess 10 million units a year, but that may be an overshoot).
2) Creates a debt trap for consumers.  Your $4500 must be used to purchase a new car, which undoubtedly will be financed.
3) Impacts the used car industry very negatively (I'm already hearing plenty of anecdotal reports) and the scrap metal dealers because they destroy the engines (which are the most valuable part of the car, by far).
4) Interestingly, the cars that will be purchased from the car dealers have less profit-margin than other cars being made.

Need I go further.

Not to mention all the scamming going on and the reality that the most common cars being bought are from companies like Toyota or Ford. Honestly, it amazes me that anyone thinks this is a good idea. This reminds me of all the government shenanigans in the home buyers market.

[paul718]

1) Pulls forward demand from the future, so when the subsidy ends, guess what will happen to the demand - it'll go below the long-term trendline in the future (whatever that number is - it's presently unsettled, I'll guess 10 million units a year, but that may be an overshoot).

I'm presently undecided, but this is the most worrying argument I've been hearing.  Are we simply pulling in tomorrow's sales for today?

[True Federalist (진정한 연방 주의자)]

1) Pulls forward demand from the future, so when the subsidy ends, guess what will happen to the demand - it'll go below the long-term trendline in the future (whatever that number is - it's presently unsettled, I'll guess 10 million units a year, but that may be an overshoot).

I'm presently undecided, but this is the most worrying argument I've been hearing.  Are we simply pulling in tomorrow's sales for today?

If we were stripping the clunkers for parts, we would, but since the engine blocks are being rendered useless, we're drying up the supply of used cars. (Which has independent car mechanics grousing because the program is taking away fixable old cars that they can make money from repairing.) So while the program's direct effect is to cannibalize future sales, much as any rebate program does, the ripple effect from the smaller supply of used cars should raise their values and bump some people who would have bought recent used cars into the new car market instaed.  Net effect is some cannibalization, but not on a 1 for 1 basis.

[opebo]

1) Pulls forward demand from the future, so when the subsidy ends, guess what will happen to the demand - it'll go below the long-term trendline in the future (whatever that number is - it's presently unsettled, I'll guess 10 million units a year, but that may be an overshoot).

I'm presently undecided, but this is the most worrying argument I've been hearing.  Are we simply pulling in tomorrow's sales for today?

No.  Spade's argument here is unreasonable.  The 'demand' for cars is theoretically almost unlimited - we could all crash our car on the way home every day just for fun if we had all the cars we wanted.  What is limited is the ability to pay for the cars.  If the government provides free cars, or a subsidy to buy cars, it is fairly likely to actually increase the total demand for cars over all time, not just 'pull it forward'.

Of course theoretically if the government bought us all a free car in 2009, it is possible that we would all be parsimonious and keep it for ten years, not buying any more cars.  But it seems more likely to me that we would just get another car as soon as we could afford it, and thus just keep more cars.

[k-onmmunist]

Lean No.

[12th Doctor]

Absolutely not.

First off, it is encouraging the exact opposite attitude that we should be instilling in people right now... the idea that they need to save, less wasteful, and smarter with our money.  Many of these cars that people are turning in could be repaired for alot less than the cost of a new car, and that would put money into the economy as well.

NPR has done a story on this.  Dealers where these car are being turned in have to "kill" almost all the cars first (as per the bill... because the car has to be "dead"), by running them for several weeks on end on their machines... and all the work they have to put into it means that, in the end, they hardly make any money off the deal.

This is just a ridiculous scheme by the Obama Administration to help keep Government Motors afloat (I am amazed they didn't make the plan so that it was exclusive to GM and Chrysler, but I figure they must at least some grasp of the reaction that would draw).  Another idiotic government intervention to justify something they should not have been doing in the first place.

Not to mention that the amount of money you get is only $4,000... so basically, you have to already have the money for a new car to afford a car under this plan.  This will just get you over the finish line.

So, in the end, millions of perfectly good cars are being junked so that we can continue to feed the already out of control spending habits of the upper-middle class.

[Alexander Hamilton]

Hell no.

[Brandon H]

No. Besides some of the other points that were made, where is the money coming from? Also, there is an organization that people donate used cars to that gives them to people that can't afford cars. I don't know exact numbers, but they've had a sudden drop off in donations.

[12th Doctor]

The real irony is that the auto companies actually make way more money off of selling individual parts.

[12th Doctor]

Polls like this never fail to remind me of this classic, BTW...

http://www.youtube.com/watch?v=iQvnwO0Q5Ak

[Person Man]

Personally, I think its a good way to flatten the current downtrend and to get a longer period of economic expansion. Sure, it hurts future sales, but people will have about $20 in their pocket. They can use it to eat out or pay off other bills....and if the car payments cancel out any savings, at least the automotive manufacturers will be given an incentive to have better cars in the future and will actually be able to make them. ...and we do need the clunker parts. Hopefully, this will draw down mechanic's costs and encourage more people to get their cars fixed.

[Democratic Hawk]

Analysts predict billions in benefits from 'Cash for Clunkers'

http://edition.cnn.com/2009/POLITICS/08/07/cash.for.clunkers/index.html

Story Highlights

-Analysts: $3 billion for program may provide $18 billion boost for economy
-Critics: Program just shifts consumer spending from one area to another
-Consumers save in gas, maintenance; auto industry sells twice as many cars