You give ‘cash for clunkers,’ and you get clunkers

When I read yesterday about all these giddy car-buyers getting $4,000 each to turn in their “clunkers,” I thought, “They really went through with this?”

Figure it out. If every family in America got a $4,000 rebate to trade in a gas guzzler for a new car, the federal government would have to borrow $480 billion to cover the bill.

How much money was actually allocated (borrowed from China) for the “cash for clunkers” program? $1 billion.

Sudden death. The program is one day old, and it’s ready to collapse. Tens of thousands of buyers have committed to purchases under the program, but last night the fearful whispers grew loud. The Associated Press reports: The rebates might be cut off.

Is this the model for federally regulated health care? Pretend all of us will have shiny happy medicine, but then pull the plug because someone forgot the bill?

Frank Warner

Comments

[David Holliday]

Actually it's up to $4,500 each. I hope they don't cut it off before I get mine! But seriously, Obama said, “I think when you spread the wealth around, it's good for everybody." What was unclear about that? Are you surprised that he is following through on what he said? Actually, while it’s true that he hasn’t followed through on many of his campaign pledges, he has clearly demonstrated that he is a prodigious spender and that he doesn’t have any qualms about piling up a mountain of debt and increasing taxes to pay for it. And to top it off his party has overwhelming control of both houses of Congress and has installed the two most liberal leaders in those bodies in the history of this country. So what’s to stop him? Nothing.

[Frank Warner]

I just picked the $4,000 as an average.

And what's to stop each of us from taking "our" $4,000? In fact, why not give each family $1 million?

[CJW]

Five reasons why Obama and Congress will make Cash-for-Clunkers a permanent federal entitlement

[David Holliday]

$2 billion more. That's so wrong. Especially when compared to the following table showing Federal funding in 2008 for medical research:

Breast cancer early detection: $54 million
Breast cancer treatment: $169 million
Breast cancer prevention: $24 million
Alzheimer's Disease: $2 million
Arthritis: $1.7 million
Childhood cancers: $189 million
Down Syndrome: $955,504
Diabetes: $8.5 million
Multiple Sclerosis: $457,000
Muscular Dystrophy: $302,000
Tropical diseases: $8 million

[David Holliday]

More craziness, according to the Tax Foundation, newly released data from the IRS shows Tax Burden of Top 1% Now Exceeds That of Bottom 95%. The analysis, which uses 2007 data, shows the top 1 percent of taxpayers paid 40.4 percent while the the bottom 95 percent paid 39.4 percent of the total income taxes collected by the federal government. And yet Obama and Biden don't think the "rich" pay enough in taxes and they want more. More to spread around, more for cash for clunkers, and more for whatever other brilliant wealth redistribution schemes they can come up with. Margaret Thatcher said, "“The trouble with socialism is that you eventually run out of other people’s money."

[Frank Warner]

From an economics point of view, the first big question is, what percent of these newly purchased cars are American-made?

[jj mollo]

The income of the top 1% has also been getting more and more disproportionate with the rest of the population. Money is the greatest generator of money. Such a gravitational system attracts and extracts with increasing efficiency. Why should such a small part of the population be permitted to concentrate wealth and power to such an extent? There is some justice in the answer that their actions are economically beneficial to the rest of us, but more and more their actions are economically extortionate rather than productive. Madoff may be an extreme example, but there's a little bit of Madoff embedded in the entire culture of the oligarchy.