Cash for Clunkers May Cost Up to $45,354 Per Vehicle 286 comments
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The "Cash for Clunkers" program has been a "great success", at least according to the government, and the auto industry. Within days of its kickoff, all $1 billion allocated to the program has been used up by Americans who have eagerly lined up to trade their clunkers for new vehicles.
Some refreshingly honest reporting has come from Edmunds.com, a car buying site that is telling the truth, in spite of benefiting from an increase in business and site traffic, due to the program. According to Edmunds, about 200,000 old low mileage cars would normally be traded in, every 3 months, in exchange for more efficient higher mileage cars, without this program.
The highest rebate is $4,500, and the lowest is $3,500. If everyone qualified for $4,500 per vehicle, about 222,000 vehicles would have just taken advantage of the government's money. At $3,500, 286,000 vehicles will have been sold.
I assume that, given all the raving, the government will eventually get around to assigning more money. It will take at least 2 or 3 months for the legislation to work its way through Congress. Meanwhile, if all buyers have qualified for the higher $4,500 rebate, the "cash for clunkers" program will mean a marginal increase in car sales of 22,000 this quarter. $1 billion divided by 22,000 means a net cost to the government of $45,354 per car.
If all buyers only qualify for the $3,500 rebate, it means a marginal increase in sales of about 86,000, or a net cost to the taxpayers of $11,628 per vehicle. In all likelihood, however, there will probably be a mix of vehicles qualifying for various rebates between $3,500 and $4,500. Based upon that assumption, Edmunds.com estimates that the average cost to the taxpayer will be about $20,000 per vehicle.
Even most of the marginally extra sales really represent people who were going to buy a new car eventually anyway. They are just buying a bit sooner than they expected. Old clunkers don't last forever, and they are almost all eventually replaced. The government is shifting tomorrow's demand to today, stealing from tomorrow to pay for today, but at great cost to the taxpayer.
The "cash for clunkers" program is yet another boondoogle - an expensive waste of precious taxpayer dollars. Government spending should be reined in, in light of the multi-trillion dollar unsustainable deficits that this nation now faces. However, if we must increase government spending, the money would be better spent on infrastructure and education improvements that might help bring jobs back to America, and encourage long term growth, rather than cosmetic improvements to the short term earnings of makers of high mileage automobiles, many of which are foreign companies.
This government is, unfortunately, a reflection of the current state of economic immaturity that prevails in America. The vast majority of people, including most people in Congress, do not understand the forces that drive the real economy, and see only the short term view. That is how they get manipulated into allowing the Federal Reserve to behave like a slush fund for big banks, passing programs like TARP into law, and enacting programs like "cash for clunkers" which all abuse the taxpayers.
Disclosure: No positions in any automaker.
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This article has 286 comments:
Example: person trying to trade in minivan with >100,00 miles that was only worth $1,000 for a new vehicle. It get's his only smoker off the road, he gets into a clean and safe car, a car gets sold so the dealer and car company make money, the factory workers get to build a replacement and all the suppliers get to build all the parts. Also along the way the Gv't charges taxes on the sales, salaries etc... Short term it is an expensive program but at least real taxpayers are getting some benefit that is also good for the economy with some benefits for the ecology.
The math is absolutely correct. The idea is that a certain number of cars/trucks would have been sold anyway - Edmunds says 200,000 clunkers are traded in for fuel efficient vehicles EVEN WITHOUT GOVERNMENT SUBSIDIES!
The cost to the government of a "stimulus" is NOT $3,500 - $4,500 per car, because many buyers are getting the money even though they WOULD HAVE BOUGHT ANYWAY, without the program.
At $4,500 per extra car, the program costs the government $45,354 for each extra sale, above those that are normally sold anyway, exactly as the article states.
However more importantly, are the lines, "This government is, unfortunately, a reflection of the current state of economic immaturity that prevails in America. The vast majority of people, including most people in Congress, do not understand the forces that drive the real economy"
Brilliant lines, they sum up the entire mess. We have a bunch of good speakers in office that don't know their a*s from their elbow when it comes to the economy. The American people don't either as they have an anti-business mentality, learned mostly through our liberal education system.
The country is going to come out of this recession, only because of the trillions that are being spent. However, within 2 to 3 years you will see disaster strike due to these same spending policies. Our problems will be much worse then. This all due to ignornat Americans electing people that speak well.
Boy those unions bought Obama but good.
Do you stinking liberals get it?
Also, the article states that the 200,000 car figure data comes from Edmunds.com, which, apparently, has indicated (and they are about the most expert source of such data that exists) that this is the normal number of "low mileage" (or "low miles per gallon" old cars) that are traded in for new "high mileage" (or "high miles per gallon" new cars) every 3 months.
On Jul 31 01:43 PM dancingdad wrote:
> Avery must be a republican because he does math like one. His arguments
> are like the ones Bush made going into Iraq. First note he said
> 200,000 low mileage cars are traded in a normal 3 month period. (
> I'm willing to bet a large percentage of the clunkers coming in are
> high mileage ones.) He then assumes that all the clunker cars replace
> all the normal trades (bad assumption). His faulty logic leads him
> to conclude that 222,000 clunkers - 200,000 normal trades so we get
> 22,000 additional trade activity for $1B. All wrong, all worst case
> assumptions, typical republican BS.
He is not wrong in terms of how many additional or incremental sales resulted from this program. Taking the example of the average cost of $4,000 per vehicle to the government, there would be 250,000 cars sold under this program ($1,000,000,000 / $4,000). If 200,000 of those were going to be traded in for more efficient cars anyway, the incremental sales equals only 50,000. That 50,000 additional sales is the true benefit of the program because those are the sales that would not have happened during the current timeframe otherwise. Of course, they would have happened at some point in the future anyway, so we are only, as the author points out, moving future sales into the current period.
So, what the author is asking is: Is this an appropriate way to use taxpayer money? Or are there other programs that would benefits more of us and the economy overall more effectively?
On this issue, considering the manner in which the program has been managed thus far, I would have to say that it has not been money well spent. If, however, the government were to spend more over a shorter period of time the net effect to the economy would be greater at far less cost per vehicle sold. And that may provide greater short-term benefit to the broader economy.
Let's take a new example: Assuming that over the same period, the government made available $4 billion for such a program. If the average cost per vehcile were still $4,000 the number of incremental sales would jump to 800,000 new vehicles. Now the cost per vehicle to the taxpayers is only $5,000. Could that number of sales be achieved? I don't know. Would the program create a long-term benefit to the economy? No. Once you clean out all the clunkers available owned by people who are willing to sell them the cost of the program increases again and no jobs are saved or created beyond that point.
That said, I can't see any real justification for the program when alternatives are needed far more by society. While the impact on the environment would be miniscule, even that admirable goal does not justify the cost relative the benefits. Municipalities have put off replacing water and sewar systems that are over 100 years old. These systems are held together with patches and are inhabited by bacteria built up over many decades. Yes. We use chemicals to kill as many bacteria in our drinking water as possible, but it is not enough and the system does not provide an optimal health environment for the citizenry.
Local governments, such as NYC, Philadelphia, etc. are not managing their funds efficiently enough and will never have the fiscal ability to make the necessary infrastructure investments. These projects would take years to complete and would employ thousands of people who need jobs. And they are projects that need to be done for health reasons.
Obviously, there are many other investment in public infrastructure such as bridges that are desparately needed and would support future economic growth. These investments need to be made at some point in the near future. Why not now?
However, Edmund's projections have been way way off target and in ALMOST A WEEK NOT A QUARTER the first $1 billion has been exhausted which shows how it successful is has been (it even caught the most optimistic thinkers off guard). In fact even people who don't qualify for the program have begun visiting show rooms and are buying cars.
I hope that Edmund's releases a follow up article that will help clear the misconception they have fostered.
"Edmunds.com's research shows that typically 200,000 vehicles worth less than $4,500 are traded in for new vehicles every three months."
Accordingly, Edmunds is talking about ONLY the type of vehicles which would qualify for cash for clunkers. Anyone who has even a passing knowledge of the car market knows that far more than 200,000 used car trade-ins happen every month, let alone every quarter. The used car market is far larger than the new car market, and, even now, the car makers will sell about 10 million vehicles in this depression year.
You should read things before you launch your claims of authors throwing BS. Because if you don't, you will be throwing BS yourself, which it what you've done here.
The program will take the old clunkers off the road which should be a good thing because the clunkers aren't as safe and use more gas.
Deals like the trade in program are just going to give the dealers more profit.
The deal applies to imports as well as domestic makes. It would be better to have the deal only apply to domestic makes.
The Edmunds article was written days before the new sales figure were released and i rightfully expect them to put out a new article.
This article uses a projection that is day's old and did not take into account the current sales figures.
Fact is sales have risen dramatically and while some of this may have happened anyway ask any dealer and they will say showroom traffic has picked up, people who would have stalled a buy for a year or more are now buying.
Will it steal future sales, maybe.
By scrapping (not reselling vehicles) though it will also firm up the used car market so it might also create future new car sales.
Could the money be invested in the country's future in a better way. No question on that. But hey, the little guy got a break for a change.
On Jul 31 01:54 PM dividendmachine1 wrote:
> Every person who has a beater got rid of it and teh taxpayer picked
> up the tab
>
> Another example of taking tax dollars from those who are responsible
> to subsidize someone who is not
Also, while some of the people taking advantage of this program would have bought a car anyway, there are also reports of people who heard about the plan, brought their car in for the trade only to find out they did not qualify, but still bought a new car anyway. The clunker program has likely increased foot traffic into dealers even when people do not qualify for the deal.
The cash for clunker program does not offend me as badly as Goldman receiving 100% payouts on its AIG contracts.
Can anyone confirm that Cal Worthington has been named the new Clunker Czar?
This seems to be working as planned, an initiative that has present value with an eye towards future sustainability. That $20,000 real cost per vehicle does not take into account any ancillary benefits whatsoever. There's a ton of value created for everyone involved.
On Jul 31 03:20 PM Big Bubbette wrote:
> This is BS. First we bail out the unions, GM and Chrysler. Now we
> are supplementing the purchase of vehicles, which likely will help
> out the Japanese auto makers. Meanwhile, we are borrowing more money
> to fund this program. So we keep borrowing money and buying cars
> and this is a good business model? More debt being piled on the backs
> of taxpayers. Enough already. I do not want to help my neighbors
> buy a car.
>
> Can anyone confirm that Cal Worthington has been named the new Clunker
> Czar?
On Jul 31 03:20 PM Big Bubbette wrote:
> This is BS. First we bail out the unions, GM and Chrysler. Now we
> are supplementing the purchase of vehicles, which likely will help
> out the Japanese auto makers. Meanwhile, we are borrowing more money
> to fund this program. So we keep borrowing money and buying cars
> and this is a good business model? More debt being piled on the backs
> of taxpayers. Enough already. I do not want to help my neighbors
> buy a car.
>
> Can anyone confirm that Cal Worthington has been named the new Clunker
> Czar?
On Jul 31 04:37 PM Samsung wrote:
> Interesting article. Are they giving the rebate for fuel efficient
> cars or is this just all cars? in other words - is the policy really
> going to help the economy downshift to more environmentally friendly
> cars - or will the rebate allow someone to buy a SUV ?
If everybody believed everything they said there would only be one car company left in the U.S. And that would be Honda. I'm not sure that Honda has ever lost a "comparo" in any segment ever.
The idiots over there would probably find some way to pick to a Ridgeline over a F-350 or C3500 in a comparison amongst work trucks.
The fact is that this program got people that were sitting on the sidelines, for years in some cases, into dealerships. And in the process it got rid of a lot of smog producing gas guzzlers. At the same time it will result in more recycled steel that will turn keep the price of steel down a little longer to help the economy regain steam. The only downside is it will contribute to more govermental debt which will theoretically be offset by the future taxes generated by more economic activity.
As far as accomplishing what it set out to do it has done more than most government programs usually do.
This country is so screwed.
That in a nutshell is a great explanation for how a double-dip recession gets rolling.
If 450K vehicles end up being traded in over the entire quarter, then the incremental increase will be 250K, and thus about $4000/vehicle, not $45K.
For me, the effect was: I paid state sales taxes of almost $2,000 in a state with budget problems when I would otherwise have paid nothing; a young salesman got an unexpected commission (and his very first auto sale in a new career, in fact). I am sure there are a lot of other benefits that will flow through, like maybe the dealer will make more taxable income, other employee salaries will be paid, etc.
The program is an attempt to stimulate demand for vehicles IMMEDIATELY, not five years from now.
Is it a smart program? I am not sure.
On Jul 31 06:08 PM Alfredo Martinez wrote:
> I never thought that this country would get so far off track that
> we would start using tax dollars to pay for people to buy a brand
> new car, then turn around and destroy the traded used cars and dump
> them in a landfill.
>
> This country is so screwed.
www.reuters.com/articl...
On Jul 31 11:41 PM Fitz919 wrote:
> Cars don't end up in landfills, it's not allowed. Since they have
> a cash value as scrap metal, they get recycled, just like tuna cans
> and pop cans.
As any salesman will tell you, there is no sale and no propect of one until a client walks in the door. Can't make sales in an empty showroom. Dealers are reporting as high as one to one non rebated sales taking place as a result of the added traffic.
Finally, the real economic impact is actually a boon insofar as it leverages the purchase from the consumer four or five to one at minimum, produceing local sales tax, jobs, distribution, recycling, future warranty work etc. I think your article is politically motivated, untruthful, and flat out wrong. Other than that, good job.
On Jul 31 02:08 PM Philman wrote:
> Sorry, my friend. You obviously didn't read this article or the
> Edmunds.com article. Let me quote from Edmunds:
>
> "Edmunds.com's research shows that typically 200,000 vehicles worth
> less than $4,500 are traded in for new vehicles every three months."
>
>
> Accordingly, Edmunds is talking about ONLY the type of vehicles which
> would qualify for cash for clunkers. Anyone who has even a passing
> knowledge of the car market knows that far more than 200,000 used
> car trade-ins happen every month, let alone every quarter. The used
> car market is far larger than the new car market, and, even now,
> the car makers will sell about 10 million vehicles in this depression
> year.
>
> You should read things before you launch your claims of authors throwing
> BS. Because if you don't, you will be throwing BS yourself, which
> it what you've done here.
That is the point behind the entire program. You get people to buy new cars that get really good gas mileage and help to wean us from buying foreign oil.
Forget politics, this is good for America. It helps people buy new cars instead of used ones plus it reduces our dependence on foreign oil and it PUTS PEOPLE TO WORK.
The Chrysler plant in Fenton, MO is reopening because of the increased sales regardless of where the sales came from.
My brother in law sold 6 rigs under this program in one day and he tells me none would have been new cars if the program had not existed.
I believe the scrapping of 200,000 cars, provides an underestimated benefit to the auto industry, and indirectly but significantly, the financial industry.
The value of every used car in inventory, or held as collateral, will increase immediately due to the removal of 200,000 units. Granted, the increase may be small on an individual car basis, but quite significant across the millions of cars the financial industry is "holding" in auto inventory and consumer financing.
According to reports Friday, they are going to use funds remaining in the TARP program. So no wrangling over funding source, etc. Resurrection might take less than the proverbial 3 days.
HardToLove
Your suggestion that it's a lot of sales being pulled forward is supported by Michael Jackson (not the *dead* one, the one that runs Auto Nation). He states that most of the buyers they are seeing have *much* higher average credit scores (720+) than normally seen. He says that people with good credit scores tend to switch vehicles much less frequently, on average, than those with lower scores. If a *substantial* portion of the program consists of the more qualified, I suspect that the near-term rise in sales will be offset in the future, as you suggest.
HardTolove
HardToLove
On Jul 31 01:54 PM dividendmachine1 wrote:
> Every person who has a beater got rid of it and teh taxpayer picked
> up the tab
>
> Another example of taking tax dollars from those who are responsible
> to subsidize someone who is not
Logic and assumptions must be carefully examined. $45,000 per car is and example
The whole article made no sense to me at all.
On Jul 31 01:53 PM Mark Bern wrote:
> The actual cost, terms of cash, to the taxpayer on each car is only
> the amount paid out, or on average about $4,000. However, the cost
> to the economy can only be calculated by estimating the actual benefit.
> This is the cost that the author is trying to use. It's not really
> the direct cost to the government, but is rather the measure of benefit
> purchased by the government investment to the econoomy as a whole.
> What the author contends is that the government added only the incremental
> sales to the economy and that the cost of those car sales that would
> have been made without the program were not the result of the program
> and, therefore, should not be counted. The result is that the government
> added maybe 50,000 incremental, or new, sales at a cost of $1 billion.
>
>
> He is not wrong in terms of how many additional or incremental sales
> resulted from this program. Taking the example of the average cost
> of $4,000 per vehicle to the government, there would be 250,000 cars
> sold under this program ($1,000,000,000 / $4,000). If 200,000 of
> those were going to be traded in for more efficient cars anyway,
> the incremental sales equals only 50,000. That 50,000 additional
> sales is the true benefit of the program because those are the sales
> that would not have happened during the current timeframe otherwise.
> Of course, they would have happened at some point in the future anyway,
> so we are only, as the author points out, moving future sales into
> the current period.
>
> So, what the author is asking is: Is this an appropriate way to use
> taxpayer money? Or are there other programs that would benefits more
> of us and the economy overall more effectively?
>
> On this issue, considering the manner in which the program has been
> managed thus far, I would have to say that it has not been money
> well spent. If, however, the government were to spend more over a
> shorter period of time the net effect to the economy would be greater
> at far less cost per vehicle sold. And that may provide greater short-term
> benefit to the broader economy.
>
> Let's take a new example: Assuming that over the same period, the
> government made available $4 billion for such a program. If the average
> cost per vehcile were still $4,000 the number of incremental sales
> would jump to 800,000 new vehicles. Now the cost per vehicle to the
> taxpayers is only $5,000. Could that number of sales be achieved?
> I don't know. Would the program create a long-term benefit to the
> economy? No. Once you clean out all the clunkers available owned
> by people who are willing to sell them the cost of the program increases
> again and no jobs are saved or created beyond that point.
>
> That said, I can't see any real justification for the program when
> alternatives are needed far more by society. While the impact on
> the environment would be miniscule, even that admirable goal does
> not justify the cost relative the benefits. Municipalities have put
> off replacing water and sewar systems that are over 100 years old.
> These systems are held together with patches and are inhabited by
> bacteria built up over many decades. Yes. We use chemicals to kill
> as many bacteria in our drinking water as possible, but it is not
> enough and the system does not provide an optimal health environment
> for the citizenry.
>
> Local governments, such as NYC, Philadelphia, etc. are not managing
> their funds efficiently enough and will never have the fiscal ability
> to make the necessary infrastructure investments. These projects
> would take years to complete and would employ thousands of people
> who need jobs. And they are projects that need to be done for health
> reasons.
>
> Obviously, there are many other investment in public infrastructure
> such as bridges that are desparately needed and would support future
> economic growth. These investments need to be made at some point
> in the near future. Why not now?
Regardless of whether we're in love with Bush or Obama can't we see that this "recovery" spending is going to result in a huge crash that puts the most recent recession to shame and will probably make the Great Depression look like a minor inconvenience?!
Today big business and big government seem to focus on this current quarter's profits with no concern for the future because the they'll already have gotten their peice of the pie while thinking, "Party now! Play today! We may die soon anyway!" and "Let the kid's pay the bill!" Complete an utter foolishness that even Aesop taught could not work in the sad sad end to come.
Forget balancing budgets and allowing earnings/savings to dictate demand for goods, which should be the lesson.
We've got to spend again!-and spend now!, it's the only way!. So the Govt. goes with what the Govt. knows best!!.
"Psssssst"--"Hey buddy look what I got for Ya!, see in this envelope, $4,500.00 bucks"!!. Yeah, that they know all about--it's called the BRIBE!!.
Forget your Company's cutting back, forget your behind in your mortgage, and your credit cards maxed out, we'll finance the balance of the car on easy terms with low interest. Get in on the recovery while the gettin's good.
Those are the real numbers that matter, to the worker, in the here and now. Turning him back into a laissez faire spend and borrow consumer is NOT the answer no matter who pays how much or when!!. We're just making his hole deeper and greasing the sides with phony bribery induced increased debt obligations.
If this is what all this writer and all these commenter's believe is the appropriate manner to get an economy on a solid footing---then I give up!.
1. Yes the clunkers would have been traded in anyway but not with the frenzy that has developed at present.
2. When the person/family completes the trade-in, perhaps they are feeling good having "saved" so much and decide to spend (on other things) the money they had saved...thus further stimulating an economy that is a clunker itself. The very few billion being spent by the government here will sow good seed and the yield will outpace the investment considerably. Now if you were talking about spending on unnecessary wars...........well that's another whole story. Just let us not forget who the screwups were...and their names are not Obama and Biden!
On Jul 31 01:34 PM Philman wrote:
> You guys need to learn economics. You either didn't read the article
> or can't understand the concept being discussed.
>
> The math is absolutely correct. The idea is that a certain number
> of cars/trucks would have been sold anyway - Edmunds says 200,000
> clunkers are traded in for fuel efficient vehicles EVEN WITHOUT GOVERNMENT
> SUBSIDIES!
>
> The cost to the government of a "stimulus" is NOT $3,500 - $4,500
> per car, because many buyers are getting the money even though they
> WOULD HAVE BOUGHT ANYWAY, without the program.
>
> At $4,500 per extra car, the program costs the government $45,354
> for each extra sale, above those that are normally sold anyway, exactly
> as the article states.
The benefit to the U.S. auto industry will also be muted by the percentage of cars which are sold under the program but produced outside the country. By example, I purchased a car under the program. I traded an old Mercedes with no nominal value for a VW diesel. My decision was influenced by the program. I purchased the VW because my first choice, a new Mercedes, would not qualify because of the price. I purchased a diesel because the MPG qualified for the higher rebate and an additional tax credit off my taxes next year. The upside to the program was that an old dirty low mileage car is gone from the roads, but I would have done that anyway. The downside is that the taxpayer is now saddled with $5,800 in debt ($4,500 rebate and $1,300 tax credit). The car I purchased is assembled in Mexico with parts made in Germany, the Czech Republic, Poland, Mexico and the US (in that order). I assure you we as citizens will be paying the debt generated by my purchase off long after the car I purchased under the program has been itself scrapped. What was gained? I personally gained a lot. The taxpayer who didn’t or couldn’t take advantage of the program, I think lost. Such is life in the U.S. these days.
get a little perspective 4 a change.
> jack
One positive outcome is still possible : Congress may eventually do the fiscal right things - but not until they have tried everything else of course.
This is the problem with government doing anything. One dollar gets 10 cents of service.
The US government must get this money being given to both Israel and the US taxpayers from somewhere else: China. And in the last two debt auctions, China was not a dominating buyer anymore. OOPS.
And worse: the free trade gang demanded this stimulus money be also spent on buying foreign cars that are imported to the US. So, we go deeper into debt and this is restarting Japan's auto import industry. Great. This, alas, won't fix our trade deficit which, during the worst collapse of international trade, is still nearly half a trillion dollars this year! Amazing.
This rebate bonanza doesn't address this problem at all. The dual budget and trade deficits are still roaring along. In 2006, the two together was $1.5 trillion and today, the two together are now $2.5 trillion. My god, are we going into a very deep hole!
I bet that 90% of the people that trade in so called clunkers buy USED cars not new ones.
The purpose of the program is to put people back to work selling and making NEW cars that get better gas mileage and to that end the program seems to be working. At least the car salesman is keeping his job and still paying taxes.
The multiplier effect of the money spent on this program will eventually pay for the money spent on the program.
Presenting valid numbers is not "political." This program might have benefits for our struggling economy. Incentives are a good idea. But the cost of this program is excessive like most government interference. Debt is going to destroy the government itself as it is doing in California. Those benefits could easily be duplicated by significant tax deductions for purchasing the new vehicles.
On Jul 31 02:34 PM dancingdad wrote:
> Not quite so fast. The people getting the rebates are taxpayers and
> many of them, probably most are very responsible and know a deal
> when they see it. I have no problem with the people buying cars.
> The system gave them an opportunity and they took it. At least they
> are getting a little of their tax dollars back. When you compare
> this program to the the Wall Street bailout or the auto bailout,
> this really isn't that bad and at least it helps the guy on the real
> street.
>
> Could the money be invested in the country's future in a better way.
> No question on that. But hey, the little guy got a break for a change.
>
FYI, two wrongs don't make a right, and I can guarantee you 100% of the people that oppose a stupid idea like paying people to buy a new car also oppose taxpayers subsidizing banks and businesses.
On Aug 01 08:45 AM dividendmachine1 wrote:
> I'm not aginst the program in theory
>
> But what about those like teh guy above who bought a car 2 months
> ago
>
> These programs need to be thought out better in advance
>
> If the government REALLY wants to end dependency on foreign oil EVERYONE
> should CUT 50% from all earmarks and use the money saved to CUT PAYROLL
> TAXES for EMPLOYEES and EMPLOYERS
>
> You SHOULD NOT be buying anything if you dont have ajob
>
> Many that were driving clunkers SHOULD BE because they have not saved
> for a new car A new car SHOULD be a privlidge
The real problem with cash-for-clunkers is that it had too many restrictions on it. As usual, our government had to mix their social agenda into the legislation, so the supposed "rich" were excluded from being able to use the program. If we want to stimulate auto sales, why exclude anyone?
On Jul 31 01:43 PM dancingdad wrote:
> Avery must be a republican because he does math like one. His arguments
> are like the ones Bush made going into Iraq. First note he said 200,000
> low mileage cars are traded in a normal 3 month period. ( I'm willing
> to bet a large percentage of the clunkers coming in are high mileage
> ones.) He then assumes that all the clunker cars replace all the
> normal trades (bad assumption). His faulty logic leads him to conclude
> that 222,000 clunkers - 200,000 normal trades so we get 22,000 additional
> trade activity for $1B. All wrong, all worst case assumptions, typical
> republican BS.
Furthermore, cars do magically materialize into showrooms. They are transported from manufactures to dealers, creating jobs. They are detailed before being delivered, creating jobs. Salespeople are paid commissions; finance workers and offices workers process paperwork, creating jobs. Taxes are paid on new transactions. New cars aren't purchased and parked in garages. New owners take them out on the road and drive them. New owners drive to dinner, visit friends and family; take quick trips. They test drive their new purchase. The velocity of money increases. By the way, this is the point of the program.
We can debate the politics of spending money this way, but to state each car purchase can cost up to $45,354, without honestly accounting for any offsetting financial benefits, only government bashing, displays a lack of any serious critical thinking.
The issue is not whether the program works or not; it is whether it is worth the price. The bottom line is that for someone to benefit, someone else has to involuntarily contribute.
However, the article has become a chapter from Math Quest.
It was a leap of faith on your part that paragraphs 2 through 5 would be an easy transition for non-Economists. A link within the article to information regarding Marginal Analysis might have made the article more understandable to non-Economists. Then again, maybe not.
Apparently “at the margin” is not something readily understood. Further, “opportunity cost” seems to be misunderstood.
However, you are exactly correct in your Marginal Analysis within your article. You conclusion is correct as well.
An extension to your argument might be that an exogenous agent has created Price Distortion (P) which always distorts Demand and/or Supply. Distortion of price is poor economic policy.
On Jul 31 01:34 PM Philman wrote:
> You guys need to learn economics. You either didn't read the article
> or can't understand the concept being discussed.
>
> The math is absolutely correct. The idea is that a certain number
> of cars/trucks would have been sold anyway - Edmunds says 200,000
> clunkers are traded in for fuel efficient vehicles EVEN WITHOUT GOVERNMENT
> SUBSIDIES!
>
> The cost to the government of a "stimulus" is NOT $3,500 - $4,500
> per car, because many buyers are getting the money even though they
> WOULD HAVE BOUGHT ANYWAY, without the program.
>
> At $4,500 per extra car, the program costs the government $45,354
> for each extra sale, above those that are normally sold anyway, exactly
> as the article states.
The gist of the article addresses the incremental cost for all those who would not normally be in the buying mode. One can argue the exact math and thereby miss the entire point of the article. The question is: How many got a windfall bonus who would otherwise have traded-in whether or not this program ever existed.
On Aug 01 11:23 AM hajimow wrote:
> I recommend either the author or the web site take this article off
> to respect the readers. I have PhD in math and I started to cry when
> I read this article. Don't they teach math in US? The only conclusion
> that I can get is that the author is a hard core republican who does
> not waht to get it. The fact is that 2 billion will be used when
> 2 billion divided by $4000 { average of $4500 and $3500} =500,000
> cars are sold under this plan and not with 22000 cars !!!
"A PhD from where?"
Love it!
Must have been from Match Book Cover U.
The greatest amount of money ever spent has occurred in the last 9 months in the US on all sorts of social programs - some for bankers, some for automakers, some for investment houses, some for insurance companies, and of course behemoths like GE.
All of this infrastructure to dole out money to people and places that don't need it. This is welfare for the connected. And yet in the quirky American mind there is the fear of "socialism" - used like a sickle against the people to push their thoughts away from real issues where the government should rightfully work on behalf of the people.
How about social programs that HELP stabilize the people like healthcare and create a strong workforce for the future? That would be a social program and an investment. How about social programs that stimulate innovation?
SO you go and dump some money into the banksters so they can trick their books into loose rules, and they can payout some wicked bonuses. NOTHING changes. They banks are still bankrupt it just kicks the ball down the road.
SO you go and outfit all of America with new cars and the spinoff from that is we all get to buy some extra stuff from Walmart for a few weeks. Nothing changes. NOTHING.
It is because BUSH cut taxes TWICE why the country is now wallowing in debt and is on the verge of having your currency replaced as the worlds reserve currency. It is because you have become such penny pincher's why you have fallen for the asinine crap of buying TERM LIFE INSURANCE which is making you all poorer. Read my book LIFE INSURANCE - The Cause Of Economic Prosperity and see for yourself xlibris.com
Americans get back to paying fair and reasonable price for living. Stop this unrelenting quest for cheapness and stop the whining about prices and the cost of things
The best Government Program would be to help people stop using Forgein Oil and Use Clean American Fuel - Natural Gas
On Jul 31 01:05 PM whiteiron wrote:
> this sounds like total BS. how does this cost anything over $4500
> per vehicle?
So getting these cars off the road faster is serving multiple purposes in what is a very long/protracted recession, not "normal times." Though I agree that there are aspects of the Fed that has run amok, this program was generally well thought out and serving a good purpose.
On Jul 31 06:08 PM Alfredo Martinez wrote:
> I never thought that this country would get so far off track that
> we would start using tax dollars to pay for people to buy a brand
> new car, then turn around and destroy the traded used cars and dump
> them in a landfill.
>
> This country is so screwed.
On Jul 31 01:34 PM Philman wrote:
> You guys need to learn economics. You either didn't read the article
> or can't understand the concept being discussed.
>
> The math is absolutely correct. The idea is that a certain number
> of cars/trucks would have been sold anyway - Edmunds says 200,000
> clunkers are traded in for fuel efficient vehicles EVEN WITHOUT GOVERNMENT
> SUBSIDIES!
>
> The cost to the government of a "stimulus" is NOT $3,500 - $4,500
> per car, because many buyers are getting the money even though they
> WOULD HAVE BOUGHT ANYWAY, without the program.
>
> At $4,500 per extra car, the program costs the government $45,354
> for each extra sale, above those that are normally sold anyway, exactly
> as the article states.
On Aug 01 12:20 PM Dorlan H. Francis wrote:
> Americans are always complaining about COST. This is real WHINING.
> Everything is the cost the cost the cost. Get real people. You have
> something called LIFE, precious life. There is a price for living.
>
>
> It is because BUSH cut taxes TWICE why the country is now wallowing
> in debt and is on the verge of having your currency replaced as the
> worlds reserve currency. It is because you have become such penny
> pincher's why you have fallen for the asinine crap of buying TERM
> LIFE INSURANCE which is making you all poorer. Read my book LIFE
> INSURANCE - The Cause Of Economic Prosperity and see for yourself
> xlibris.com
>
> Americans get back to paying fair and reasonable price for living.
> Stop this unrelenting quest for cheapness and stop the whining about
> prices and the cost of things
The math is correct as Goodman is comparing the incremental number of old cars replaced by newer cars with the incremental governmental expenditure. On balance, an excellent article.
Are you for real ....."His arguments are like the ones Bush made going into Irag." We were attached on 9-11 or did you forget about 2900 plus people that died that day! Please don't go there.
As far as "this program!" Take a look at Germans Program that is really close to this one .....It was suppost to be a one time thing and I think there in there third year of there program! It don't work.
The Government needs to get out of the peoples way..... Let the weak companys fail . lower capital gain tax, and taxes in general.
Period.
On Jul 31 01:43 PM dancingdad wrote:
> Avery must be a republican because he does math like one. His arguments
> are like the ones Bush made going into Iraq. First note he said 200,000
> low mileage cars are traded in a normal 3 month period. ( I'm willing
> to bet a large percentage of the clunkers coming in are high mileage
> ones.) He then assumes that all the clunker cars replace all the
> normal trades (bad assumption). His faulty logic leads him to conclude
> that 222,000 clunkers - 200,000 normal trades so we get 22,000 additional
> trade activity for $1B. All wrong, all worst case assumptions, typical
> republican BS.
We can already do all of the things that this program is supposed to accomplish-----increase efficiency, reduce pollution, and MUCH more by changing the fuels that we use to biofuels. I won't try to go into a long detailed explanation of that right now, just take it as a given that the goals of this program are peanuts compared to the changes we could have with biofuels available at any pump.(we even have blender pumps that can custom mix fuel blends depending on vehicle requirements)
We could build 3 100 million gal/yr biofuel plants for about $1 Billion. You get 22 gallons of gasoline from a 42 gallon barrel of crude oil. 300 million gallons per year of ethanol rounding off and adjusting for BTU differences, would replace roughly 1/2 billion barrels per year of need for imported crude oil. Oil that we are currently buying from foreign sources that essentially buy nothing from us. For a raw material that we are only going to burn up. At the current price of about $60 per barrel, that represents about $30 Billion per year to buy a raw material overseas, that we could replace with $ 1 Billion investment to build plants tha use wood to produce the finished product(ethanol) that directly replaces the product made from the raw material(crude oil) that we purchased. And the ethanol is made completely by workers here, from raw materials(wood) that we can supply from here indefinitely. Just so long as we pay attention to replanting and managing our timber resources.
With the first year's savings alone----we could build 90 such plants. And multiply the economic benefits indefinitely.
As opposed to many poster's comments that the $1 Billion clunkers buy back is at the very least, a huge monetary investment that will produce few (if any) benefits, and at the very most, only temporary benefits. (today's new car is tomorrow's clunker)
I don't know about the rest of you, but the choice seems pretty clear to me.
But then, since now the government owns 60% of GM----it seems pretty clear to me that the whole purpose of government seems to have moved from "insure the general welfare" of "we the people" to "we the coporations"------and "we the people" be damned. "We the people" have become "we the cattle" to be milked dry, then made into hamburgers.
www.storyofstuff.com/
We were ATTACKED, not attached, on 9-11 by Al-Queda and the Taliban in Afganistan, NOT IRAQ!
On Aug 01 01:00 PM miketobias01 wrote:
>
>
> Are you for real ....."His arguments are like the ones Bush made
> going into Irag." We were attached on 9-11 or did you forget about
> 2900 plus people that died that day! Please don't go there.
> As far as "this program!" Take a look at Germans Program that is
> really close to this one .....It was suppost to be a one time thing
> and I think there in there third year of there program! It don't
> work.
> The Government needs to get out of the peoples way..... Let the weak
> companys fail . lower capital gain tax, and taxes in general.
> Period.
>
>
>
that will prove to be hard to contain and will really alter America's standard of living we used to enjoy.
On Aug 01 01:05 AM Alfredo Martinez wrote:
> 100% of cars aren't able to be recycled, and much of the scrap will
> end up in landfills.
>
> www.reuters.com/articl...
>
On Aug 01 10:52 AM Brad Johnson wrote:
> I love these straw man arguments used to support cash for clunkers.
> "Well they gave bailout money to banks!" These people will use that
> same line to justify every stupid spending idea that comes out of
> this administration.
>
> FYI, two wrongs don't make a right, and I can guarantee you 100%
> of the people that oppose a stupid idea like paying people to buy
> a new car also oppose taxpayers subsidizing banks and businesses.
On Jul 31 01:22 PM pedrom wrote:
> I believe he's quoting the cost for "incremental" sales.
> Example: person trying to trade in minivan with >100,00 miles that
> was only worth $1,000 for a new vehicle. It get's his only smoker
> off the road, he gets into a clean and safe car, a car gets sold
> so the dealer and car company make money, the factory workers get
> to build a replacement and all the suppliers get to build all the
> parts. Also along the way the Gv't charges taxes on the sales, salaries
> etc... Short term it is an expensive program but at least real taxpayers
> are getting some benefit that is also good for the economy with some
> benefits for the ecology.
Remember, this program is to remove 18MPG or less. This eliminates 1/3 of the vehicles on the road today, older Hondas do not qualify. Toyota trucks qualify but that's it.
This is one of those articles that is meant to stir the public up by shuffling math numbers. The truth of the matter is that over 200,000 trade ins were removed from the road and more importantly 200,000 NEW VEHICLES were sold to replace them.
Incremental that Edmunds.
On Jul 31 01:34 PM Philman wrote:
> You guys need to learn economics. You either didn't read the article
> or can't understand the concept being discussed.
>
> The math is absolutely correct. The idea is that a certain number
> of cars/trucks would have been sold anyway - Edmunds says 200,000
> clunkers are traded in for fuel efficient vehicles EVEN WITHOUT GOVERNMENT
> SUBSIDIES!
>
> The cost to the government of a "stimulus" is NOT $3,500 - $4,500
> per car, because many buyers are getting the money even though they
> WOULD HAVE BOUGHT ANYWAY, without the program.
>
> At $4,500 per extra car, the program costs the government $45,354
> for each extra sale, above those that are normally sold anyway, exactly
> as the article states.
Look, I understand some in DC would say don’t worry about taking away all the cheap affordable cars off the market for people who may not be able to afford a more expensive car. After all we will give the poor people money and handouts and they will be fine.
I for one am not fine with this and not only is it a total waste of money but its filled with unintended consequences like distorting the used car market. How many jobs (think mechanics, used car lots, auto parts shops and salvage yards) will be LOST as a result of this giveaway. A a very minimum lost wages and lower income for people that service used cars will happen. While no numbers yet exist and maybe hard to calculate I have to wonder what the net result is for AMERICAN jobs/income. After all some of the cars being bought are foreign made cars and most of the jobs/income being lost are American jobs.
As I understand it many of the new ‘purchases’ would have happened anyway with our without the government handout(Duh).
Whats gonna be the next great idea? How about we start burning down houses that were built before 1975 with less than 10 inches of insulation if you buy a new energy star house. That would give firefighters plenty to practice on (first controlling the burning and then putting the fires out in a controlled method) as well as take a lot of houses out of the marketplace that dont have as high of conservation levels.
You could give the new home buyer a $25K credit and that would make buying a new home more afforable. That would put a lot of people to work building new homes and get rid of a lot of excess homes on the market.
You just need to ignore the facts that it would raise the deficit (wont it be great to tell the children how their future was mortgaged away so we could destroy cars and homes) and lower the total assets that America owns but lets not get facts in the way of change.
The real scarry thing as I write this is wondering how many people will read the home burning concept and actually think it might be a solution to the housing problem......
DC should rename itself to UC (Unintended Consequences)
Want to see what they are doing with the cars to make sure no one drives a “Clunker” again. take a look at the youtube video. If your a taxpayer and this doesn't make you mad than I don’t think your paying attention.
www.youtube.com/watch?...
Hold your breath while you are waiting for your dividend check.
You will turn very, very blue and pass out.
You need to watch "The Story of Stuff"
The only people who are benefiting from all the bailout money is top coporate executives and politicians.
Look around, this has become an all you can eat buffet---with a lot of burping and farting, but in the end, YOU get the bill.
Here are the real numbers as told by a real automotive reporter.
Last week 25,000 deals were done. Even at $4500 per deal (and not all qualified for the full amount) that totals $112.5 million, not billion.
Then, there are currently 22,000 more deals in the system, so tack on another $100mm or so.
They didn't spend all the money yet, they just ASSUME they will.
This is what I know, we are being told the money might run out, which created a surge of car buying last week (and this), after that surge this program is going to fall away.
Except now it will have a couple more billion "surplus" which I'm sure Congress will find a way to spend on other things to screw us.
No WAY are there enough buyers out their to use up $3 billion this year in incentives. NOT possible.
The highest years auto sales, when jobs abounded, houses were banks and credit was free and easy, were around 16 million a year.
Congress is using this program to bolster the banks (again).
Just wait until these cars start being repo'd. Between down payments, exorbitant interest rates and free government cash, the finance companies will make out like bandits on every repo.
Just like they are doing with foreclosed homes.
Keep on helping Congress, at this rate, their won't be ANY middle class in a couple years.
sound. It takes a ton of energy and materials to produce a car.
If you have a low fuel mileage clunker, and you don't drive much
then it has a minimal effect on the environment.
Remember, this program is being brought to you by the same people
that gave you the post office, the VA hospital system, ethanol fuel
and now want to give you health care.
I note that even this modest clunker program hasn't operated smoothly as it ran out of funds almost immediately.
The article has already pointed out the program's enormous cost
being paid for with money borrowed from friendly places like China.
So much for the intelligence and structuring behind plans such as
this.
On Jul 31 06:08 PM Alfredo Martinez wrote:
> I never thought that this country would get so far off track that
> we would start using tax dollars to pay for people to buy a brand
> new car, then turn around and destroy the traded used cars and dump
> them in a landfill.
>
> This country is so screwed.
The program is naive and infantile.
If we, as a Nation, want to get serious, Congress would pass an additional gas tax of $3.00 per gallon.
An income tax credit of $1,200 per year would be given to any licensed driver, who is a citizen or has a valid green card, and has insurance.
The concept is that the government should not attempt to tell the manufacturers what cars to make. The government should stimulate the specifiers to tell the manufacturers the cars they want ot purchase, i.e., high MPG cars.
There should never be any tax credits other than the one described.
Michael Z
On Jul 31 01:39 PM WD216 wrote:
> If those are the correct numbers, then is program costing $1 billion
> and 22,000 vehicles were sold, then the $45,000 per vehicle is correct.
>
>
> However more importantly, are the lines, "This government is, unfortunately,
> a reflection of the current state of economic immaturity that prevails
> in America. The vast majority of people, including most people in
> Congress, do not understand the forces that drive the real economy"
>
>
> Brilliant lines, they sum up the entire mess. We have a bunch of
> good speakers in office that don't know their a*s from their elbow
> when it comes to the economy. The American people don't either as
> they have an anti-business mentality, learned mostly through our
> liberal education system.
>
> The country is going to come out of this recession, only because
> of the trillions that are being spent. However, within 2 to 3 years
> you will see disaster strike due to these same spending policies.
> Our problems will be much worse then. This all due to ignornat Americans
> electing people that speak well.
Better gas mileage will mean less money for state highway departments and less gas tax money means that this will put the pressure on for more gas taxes. The Federal Highway Trust Fund has been bailed out three times recently if you count stimulus money going to states. The current bailout is not settled yet because there is a difference in the House and Senate version. This money is required to pay states back for work they already did so there is a lot of pressure to at least give back the money that they borrowed from the Highway Trust Fund in this time of need.
In my state, a vehicle getting 12 miles to the gallon netted 1.533 cents per vehicle mile federal and 1.78 cents per mile state taxes. If the new car gets 20 miles per gallon, the state will get 1.07 cents per vehicle mile for the state and .92 cents per mile for the feds. It looks like the total difference between the clunker and the new car could be 1.32 cents per vehicle mile. The average two years ago was 2.5 cents per vehicle mile from all transportation taxes, state and federal. If all cars dropped overnight this much it would be a disaster. It takes about 20 years to totally turn over a fleet of non-truck vehicles. All this cash for clunkers thing is doing is accelerating the inevitable anyway, unless you foresee people trying to perpetuate their transportation forever, like in Cuba.
Cynical and paranoid people think that all of those orange barrels are just there to slow the traffic down so you can burn more gas to offset the losses to the Highway Trust Fund from CAFE standards.
Assuming the rate of car purchases remained elevated at the same level as it has been for the past five days, but for an entire quarter, what does that do to your numbers?
Put another way, compare overall car sales over the past five days both with, and then without the incentive program, what was the actual increase?
"KingGeithner:
... there are also reports of people who heard about the plan, brought their car in for the trade only to find out they did not qualify, but still bought a new car anyway. The clunker program has likely increased foot traffic into dealers even when people do not qualify for the deal."
Do you also consider the fact that many car buyers don't have clunkers? and their car worths more than $4500 so they will not trade in their car for $4500. By the way, when you trade in your car to a dealer, they will sell your car in the auction and then the government will pay only the difference and not the whole $4500 so the cost will actually be less.
On Aug 01 11:47 AM jarco wrote:
> A PhD from where?
>
> The gist of the article addresses the incremental cost for all those
> who would not normally be in the buying mode. One can argue the exact
> math and thereby miss the entire point of the article. The question
> is: How many got a windfall bonus who would otherwise have traded-in
> whether or not this program ever existed.
Now the word Billion is thrown around like there's no tomorrow and if we keep spending like this maybe tomorrow will never come
Since this bailout scam Billion is the new million and of course trillion is on the horizon. So keep printing that paper and we can keep moving up the scale.
We were not in the market, but starting to think about what happens next year when my son commutes to university at 250 miles per week instead of 50 miles per week at the community college. Yes, the 1999 Ford van he drives would go from 15mpg he gets now to the17mpg I was getting when I was using it to commute via highway. The fact that it already had 142k on it was also a concern. The tentative plan was to switch cars and have him drive my 22mpg Buick which would save about a third in gas cost.
So why did we jump? KBB put a value of $650 on the van so it was clearly worth more dead than alive. It looked like it was going to need both AC and brake work in the next several weeks, say $300-600+. We would move to a car with 28 city/35 highway rating -- say 32/33mpg effective as a highway commuter. Also, with our newest car being a 2001 we have a more dated set than normal from the reliability perspective. But I'm going to miss it as it was our high wheel clearance car that we took camping and Boy Scout activities.
Why break down and buy new? The resale market for smaller cars is such that you do not get rewarded for buying late-model used. The economics say get the best deal that you can on new and go with that.
In the end this incentive program pulled us in from doing some car switch within the family mid next year to buying a new car now. The program achieved its intended effect with me. It also returns a couple of months of my taxes to me in a form I can directly benefit from. And for those ranting on about debt -- I paid cash!
> 2 wrongs do not a right make. 3 do.
No, 3 lefts do.
HardToLove
Attempting to increase economic activity by sucking consumers into debt by giving them money is done here in Australia with first home owners grant. You get $22,000 from the government towards your first home. Of Course new homes became $22,000 more expensive overnight ... then there was there was the LP gas rebate. Fit LP gas systems to your car and you get $3600 from the government to save the planet .
LP gas installations went from an average of $1800 to $5400 overnight.
Nice little earners for those cheeky enough to rip the tax payer for as much as possible.
The $4500 being doled out by the US Government will have a poisonous sting in the tail and every taxpayer in US will feel it bite.
On Aug 01 02:42 PM devassocx wrote:
> This program is certainly not energy, nor environmentally
> sound. It takes a ton of energy and materials to produce a car.<br/>
>
> If you have a low fuel mileage clunker, and you don't drive much
>
> then it has a minimal effect on the environment.
>
> Remember, this program is being brought to you by the same people
>
> that gave you the post office, the VA hospital system, ethanol
> fuel
> and now want to give you health care.
>
> I note that even this modest clunker program hasn't operated smoothly
> as it ran out of funds almost immediately.
>
> The article has already pointed out the program's enormous cost<br/>being
> paid for with money borrowed from friendly places like China.
>
> So much for the intelligence and structuring behind plans such as
>
> this.
>
> On Jul 31 06:08 PM Alfredo Martinez wrote:
How about we pay people $250,000 if they burn down their house?
It will decrease excess inventory, and it will create all sorts of new buyers in the market. Also, the new houses will probably be more energy efficient.
On Aug 01 08:45 AM H. T. Love wrote:
> 'I assume that, given all the raving, the government will eventually
> get around to assigning more money. It will take at least 2 or 3
> months for the legislation to work its way through Congress."
>
> According to reports Friday, they are going to use funds remaining
> in the TARP program. So no wrangling over funding source, etc. Resurrection
> might take less than the proverbial 3 days.
>
> HardToLove
On Aug 01 06:16 PM DesertRat87 wrote:
> I took advantage of the CARS program and bought my first new car
> since 1986 -- a car that we drove until we junked it. We normally
> buy used, sometimes fairly new, sometimes fairly old depending on
> needs.
>
> We were not in the market, but starting to think about what happens
> next year when my son commutes to university at 250 miles per week
> instead of 50 miles per week at the community college. Yes, the 1999
> Ford van he drives would go from 15mpg he gets now to the17mpg I
> was getting when I was using it to commute via highway. The fact
> that it already had 142k on it was also a concern. The tentative
> plan was to switch cars and have him drive my 22mpg Buick which would
> save about a third in gas cost.
>
> So why did we jump? KBB put a value of $650 on the van so it was
> clearly worth more dead than alive. It looked like it was going to
> need both AC and brake work in the next several weeks, say $300-600+.
> We would move to a car with 28 city/35 highway rating -- say 32/33mpg
> effective as a highway commuter. Also, with our newest car being
> a 2001 we have a more dated set than normal from the reliability
> perspective. But I'm going to miss it as it was our high wheel clearance
> car that we took camping and Boy Scout activities.
>
> Why break down and buy new? The resale market for smaller cars is
> such that you do not get rewarded for buying late-model used. The
> economics say get the best deal that you can on new and go with that.
>
>
> In the end this incentive program pulled us in from doing some car
> switch within the family mid next year to buying a new car now. The
> program achieved its intended effect with me. It also returns a couple
> of months of my taxes to me in a form I can directly benefit from.
> And for those ranting on about debt -- I paid cash!
On Aug 01 07:55 PM optionsgirl wrote:
> I'm so happy I subsidized your car purchase. Now that you have a
> new car, I will rest better tonight. I was worried about your brakes.
> Just like you worry about mine, right?
On Aug 01 07:40 PM Alfredo Martinez wrote:
> I have a great idea on how to fix the housing market.
>
> How about we pay people $250,000 if they burn down their house?<br/>
>
> It will decrease excess inventory, and it will create all sorts of
> new buyers in the market. Also, the new houses will probably be
> more energy efficient.
> I have PhD in math...
I'm going to call 'bullshit' on this one. One does not need a PhD to discuss arithmetic. Moreover, you posted 2 comments all of a sudden on this thread, nowhere else on Seeking Alpha.
You're a liar and stink like Cetin.
The program is also obviously speeding up temporarily the car buying cycle. The program is obviously intended to get people to buy new cars now as opposed to the future. But, what happens when the incentives are gone? Future months could easily show a decline in sales because some of the sales that are occurring now, will take away from sales in the future.
The danger of a program of this sort is that it doesn't really create a sustainable growth model. And the worst thing would be if the automakers ramped up for potential demand that doesn't materialize because the government "juiced' sales now.
On Jul 31 01:34 PM Philman wrote:
> You guys need to learn economics. You either didn't read the article
> or can't understand the concept being discussed.
>
> The math is absolutely correct. The idea is that a certain number
> of cars/trucks would have been sold anyway - Edmunds says 200,000
> clunkers are traded in for fuel efficient vehicles EVEN WITHOUT GOVERNMENT
> SUBSIDIES!
>
> The cost to the government of a "stimulus" is NOT $3,500 - $4,500
> per car, because many buyers are getting the money even though they
> WOULD HAVE BOUGHT ANYWAY, without the program.
>
> At $4,500 per extra car, the program costs the government $45,354
> for each extra sale, above those that are normally sold anyway, exactly
> as the article states.
On Aug 01 10:54 PM Michael J. Golde wrote:
> I am not sure I understand the math in the article, but I do think
> it is fair to say the some reasonable percentage of the people who
> will receive rebates would have otherwise bought a new car without
> the rebate. Therefore, the only real benefit of the program is the
> incremental number of cars sold than would have otherwise been sold
> without the rebates. Maybe, as another posted suggested, that is
> how the figure of 22,000 new cars was derived or $45K+ per those
> vehicles.
>
> The program is also obviously speeding up temporarily the car buying
> cycle. The program is obviously intended to get people to buy new
> cars now as opposed to the future. But, what happens when the incentives
> are gone? Future months could easily show a decline in sales because
> some of the sales that are occurring now, will take away from sales
> in the future.
>
> The danger of a program of this sort is that it doesn't really create
> a sustainable growth model. And the worst thing would be if the automakers
> ramped up for potential demand that doesn't materialize because the
> government "juiced' sales now.
God help make the people in charge see reality...Please!!!
I won't even go into the details. HORRIBLE ARTICLE!
Super high carbon taxes for older cars, forcing people to scrap them or pay.
On top of that, the cash for clunkers program is generating a lot of interest in buying cars. There were (and will be) likely incremental sales beyond just the increased trade-in sales. Among other reasons, we have all heard the saying, "you have to keep up with the Joneses." Few truer words have ever been spoken. Hence the incremental sales cause further incremental sales. The heightened interest generated by this program causes further incremental sales. When you factor all of this in, you may have likely brought the subsidy cost per incremental car sale down to near the $5000/car range. You should also take into account that the extra people manufacturing, servicing, and selling those extra cars will then be able to pay more taxes. They will also be spending more money in other areas of the economy.
Obviously the program is not as efficient as it might be. Few government programs are. It is also hardly the ridiculous cash "black hole" that this writer has made it out to be. Plus it specifically addresses a particularly hard hit area of the economy, which needs help badly. I think some harder and more thorough thought should have gone into this article and the above comments.
The only loser in that equation are large multi-national energy corporations, for whom I have little sympathy. (Disclosure: I have investments in some of these very same energy corporations.) The energy sector needs to learn to live without subsidies.
If cash for clunkers is such a great idea why not remove the cap and continually run the program? It should then always stimulate the economy and always keep people trading up in mileage. Therefore always improving the environment and always creating new jobs.
It has been proven the best way to stimulate the economy is to leave more money in the hands of consumers and producers. It has also been proven the best way to reduce something is to tax it more. Therefore if you want less prosperity tax the prosperous more.
The government is the least effecient way to do anything. If anyone can disprove this please let me know.
On Aug 01 03:54 PM Danny Newton wrote:
> What about the tax consequences? More efficient cars have in the
> past encouraged driving., I don't think that is going to happen now
> because of the Baby Boom Demographic getting out of their cars and
> not going to work as after as in the past.
>
> Better gas mileage will mean less money for state highway departments
> and less gas tax money means that this will put the pressure on for
> more gas taxes. The Federal Highway Trust Fund has been bailed out
> three times recently if you count stimulus money going to states.
> The current bailout is not settled yet because there is a difference
> in the House and Senate version. This money is required to pay states
> back for work they already did so there is a lot of pressure to at
> least give back the money that they borrowed from the Highway Trust
> Fund in this time of need.
>
> In my state, a vehicle getting 12 miles to the gallon netted 1.533
> cents per vehicle mile federal and 1.78 cents per mile state taxes.
> If the new car gets 20 miles per gallon, the state will get 1.07
> cents per vehicle mile for the state and .92 cents per mile for the
> feds. It looks like the total difference between the clunker and
> the new car could be 1.32 cents per vehicle mile. The average two
> years ago was 2.5 cents per vehicle mile from all transportation
> taxes, state and federal. If all cars dropped overnight this much
> it would be a disaster. It takes about 20 years to totally turn
> over a fleet of non-truck vehicles. All this cash for clunkers thing
> is doing is accelerating the inevitable anyway, unless you foresee
> people trying to perpetuate their transportation forever, like in
> Cuba.
>
> Cynical and paranoid people think that all of those orange barrels
> are just there to slow the traffic down so you can burn more gas
> to offset the losses to the Highway Trust Fund from CAFE standards.
>
surprise anyone at all! Mis-education and ignorance apparently
have been the objective of the entire educational system here
for quite some decades now. Even college business graduates have never heard of Ludwig Von Mises or Austrian economics because of their "Keynesian economic" brainwashing!
Again I say Adloph Hitler was quite correct: "it is such a wonderful
thing for the governments that people don't think!"
Need we know anymore than that to explain the problems here? I
think not!
Erick Tippett
Chicago, Illinois
This program started a couple of weeks ago, and is projected to run out before August, if it hasn't already. That means, according to the author's numbers, 200k + cars would have been traded in within a period of less than a month, NOT LESS THAN A QUARTER. Edmund's numbers are about 200k cars traded in per quarter, so the fact that the government has been able to triple this rate (same number of cars traded in in 1/3 the time) should demonstrate that the program is working.
The real exercise should be to look over the entire 3 month period in question to see if trade-ins rose by an appreciable amount. The fact that the quarterly statistic has already been reached in less than a one-month time frame should raise eyebrows.
The article writer is saying that purchasers who were going to purchase regardless are using up the plans funds without increasing sales figures above what would have been achieved without the clunkers program.
So now that there are wasted $$ it is possible to see that those sales to purchasers who were going to purchase in the more distant future are the sales that the plan is buying. The clunkers plan $$ are really spent on the second group of purchasers who would buy in the more distant future. AND since sales are stole from the future, the car sales men are going to need to work extra hard in the future or continue to receive government aid.
On Jul 31 01:05 PM whiteiron wrote:
> this sounds like total BS. how does this cost anything over $4500
> per vehicle?
On Aug 02 12:54 AM Fitz919 wrote:
> When Cash for Clunkers is gone, what will Obama's next idea be?<br/>
>
> Super high carbon taxes for older cars, forcing people to scrap them
> or pay.
On Aug 02 12:54 AM Fitz919 wrote:
> When Cash for Clunkers is gone, what will Obama's next idea be?<br/>
>
> Super high carbon taxes for older cars, forcing people to scrap them
> or pay.
The "Cash for Clunkers" program is yet more welfare for the well-to-do. People who aren't rich enough to qualify for the hefty loans needed to buy a brand new car (and the cost of a new car is hefty, even with government giveaway money) are sh-t of of luck! They pay taxes, and their money gets given away to richer folks who just need a little incentive to buy new cars.
Meanwhile, a lot of quality used cars are going to be junked, driving up the price of used cars for the rest of us! Fat cats, like Machiavelli, obviously don't give a damn about anyone less fortunate than you. So, just like his namesake, he does whatever is good for him, without concern over the consequences for others. This article is excellent in bringing out, at least in part, some the consequences of government waste and overspending.
Cash for Clunkers is bad economics and bad for America!
On Aug 02 12:25 AM Machiavelli999 wrote:
> This guy, like most people on this site, has no clue about how economies
> work.
>
> I won't even go into the details. HORRIBLE ARTICLE!
On Aug 01 07:35 PM MSimon wrote:
> Now what about all the poor people who will be denied the clunkers
> they need to get to work because the clunkers were crushed?
That is without all the taxes being paid, banks making money, dealers, insurance, etc.
On Jul 31 01:05 PM whiteiron wrote:
> this sounds like total BS. how does this cost anything over $4500
> per vehicle?
Program fully embraced by consumers because in their eyes, they are getting something for nothing, Car dealers dont care because a sales is a sale, government is happy because they can say their initiative have stimulated sales, it was exactly the same with the housing market so this plan as with housing will bite us in the butt in the coming years for sure.
No mater how you work the numbers the Government is robbing Peter to pay Paul, remember there is an election next year
being traded in---that may have been in better
times, and how many of the numbers include
25 year old cars is a good question, but the
fact is it is a stimulus, raising consumer confidence,
getting more money into circulation to not only
the owners of car dealerships, but the entire
employees of the dealership and those also
involved in the process of making, delivery, and
even floor financing. It is "encouragement"
of the economy.
On Aug 01 01:05 AM Alfredo Martinez wrote:
> 100% of cars aren't able to be recycled, and much of the scrap will
> end up in landfills.
>
> www.reuters.com/articl...
>
Why not a $4,500 tax credit?
Why charge me tax dollars to pay for someone else's purchase?
Why? To increase the size and power of the Federal Government of course.
This is about Socialism and power - not the economy.
Strange how a greased palm can't grasp right and wrong.
I suspect the USA your grandchildren will know will not resemble the good ole USA you knew. I believe the situation will be so bad that the debt will be a minor problem.
Good thing about being old, I will not have to see but so much degradation.
On Jul 31 01:46 PM update wrote:
> This SCAM is costing my great grand children the interest payment
> on a BILLION, soon to be THREE BILLION DOLLARS.
>
> Boy those unions bought Obama but good.
>
>
> Do you stinking liberals get it?
On Aug 01 09:44 AM redink wrote:
> The clunker purchase with tax dollars is a dumb idea whatever the
> cost since 100 % of these cars will be crushed shortly anyway. So
> we speed up the demise of a few gas guzzlers - this is liking pissing
> in the ocean to make the sea level rise. Dumb idea and a total waste
> of taxpayer money. They should crush Congress instead. Now that would
> save taxpayers billions!
On Aug 01 05:51 PM William M Wright wrote:
> The next time an attorney presents a bill for $4,500 to a client
> we will use Avery's new P.T. Branum math logic to say it's actually
> costing the client $45,354 dollars.
Not to mention the hundreds of billions Paulson doled out to his Wall Street buddies, or the effects of Phil Gramm and his "Enron Loophole"
Yup, we sure are better off when the "conservatives" are in charge.
On Jul 31 01:46 PM update wrote:
> This SCAM is costing my great grand children the interest payment
> on a BILLION, soon to be THREE BILLION DOLLARS.
>
> Boy those unions bought Obama but good.
>
>
> Do you stinking liberals get it?
Where the heck do you think this money is coming from? The sky? Every dollar that your father was given by Cash for Clunkers, and Chrysler, was stolen from the pockets of our children and children's children. We are irresponsibly building up a national debt that cannot be paid back. That will result in complete dollar collapse and economic collapse eventually.
The first $4,500 came from the "Cash for Clunkers" program, the second $4,500 came from the Chrysler bailout money. You people are so selfish and self interested, it disgusts me! Obviously, you are okay with stealing from other taxpayers. I'm not!
On Aug 02 01:36 PM Laughing wrote:
> who cares its called helping out the poor people by giving them a
> little extra cash, what a lame article. I talked my father into
> buying a new car, he traded in his 1981 station wagon, rust and all,
> got $4500 plus $4500 more for buying a Crystler, wound up paying
> 18k. I gave him the money to do it, I didn't need a second car either
> but was worried ever since he told me about how the brakes went out
> while he was driving it and he had to downshift and use parking brake
> just to stop!!! You tell me where else anyone could have got 9k
> for a car worth $400 (and who would have even bought it, trust me!)?
> Its a great program, he would never have bought a car otherwise and
> now I have a ride next time I'm in town visiting.
The responsible and intelligent people do not own gas guzzling clunkers; they have ditched these long ago for more fuel efficient cars.
One more time our government is throwing money to bail out the wrong crowd.
The Edmund’s figure does not factor the removal of the vehicle from used vehicle inventory, nor consider the residual effect of generating used parts sales. Vehicle parts often cost three times the value of the auto when new. Therefore, as long as the figure of 250,000 vehicles is used of which 200,000 are ordinarily trade-ins anyhow, the fact is on paper, each vehicle will be removed from service.
Think Green
Secondly, Bush and his war loving cronies are costing your "children" more than Obama ever will!! Think about it. We are in TWO wars right now that are not going to end quickly. We have financed the "War of Lies" using credit and debt. The U.S. has not paid a single cent on the debt... yet!
Also, keep in mind that Bush came up with the first hand out to his corporate/bank friends. You know, money being used to pay huge bonuses to the losers that caused this problem.
Bush = Greed = The end of America!!
What is "BS" is the actual financial intelligence of the average American.
On Jul 31 01:05 PM whiteiron wrote:
> this sounds like total BS. how does this cost anything over $4500
> per vehicle?
I could use a more energy efficient big screen tv........
The Govt pays 3,500 - 4,500 $ per care. Somewhere you lost a 0 - or added one in. But the logic is totally flawed.
It shows what happens when someone wants so badly to be negative that they loose all sense of reason. If you had been more critical of the WMD stupidity then you could have saved this country over 4,000 lives and more than $1 TRILLION!
LMAO
But now - as soon as Obama want to use Cap and trade - the "conservatives" are all against it!
It just goes to show that the Republicans have no real point of view - they just want to criticize the Dems no matter what.
Just Nattering nabobs of negativism!
To the extent that this program decreases the number of used cars available on the market, lower income workers are going to be hurt. Another unintended consequence, I'm guessing, is that many of the people who have rushed out to participate in this program are not going to be able to keep up their payments. They've been lured into making an unwise invesment in a new car that they didn't really need.
To the extent that this program decreases the number of used cars available on the market, lower income workers are going to be hurt. Another unintended consequence, I'm guessing, is that many of the people who have rushed out to participate in this program are not going to be able to keep up their payments. They've been lured into making an unwise investment in a new car that they didn't really need.
On Aug 02 03:03 PM hotzand wrote:
> 165 comments before mine so most of the arguments have been made,
> but here's my thought, you have a leak in your beer keg, you can
> call a guy to come and repair it, by the time he arrives all the
> beer has leaked out. If you go and get a jug and catch the beer,
> no loss. That's what happens here, US is leaking jobs and wealth,
> fix it now and you avoid the losses in the future. By the way, anyone
> mentioned the effect of the other reason behind the programme, cleaner
> air?
But now - as soon as Obama want to use Cap and trade - the "conservatives" are all against it! ("SCARE QUOTES")
It just goes to show that the Republicans have no real point of view - they just want to criticize the Dems no matter what. (NO MATTER YOU CRANK, paranoia!)
Just Nattering nabobs of negativism! (POSITIVELY DELICIOUS!)
those that took advantage are smart opportunists!
obama and congress are frauds for approving the program as it was intended originally to support the POOR who never qualify to buy up to NEW and only can afford to trade up from USED badly running to USED better running!
where is the rebate for the poor/working class who struggles as a waiter/waitress/student and drives a real clunker,one that FAILS emissions at the state DMV? these are often cars getting less than 10 MPG and if they were rebated $3500 each than we trash their old vehicle,double the MPG easilly to 20MPG,improve the air quality, get a safer vehicle on the street, and help those who REALLY NEED IT!
all other programs are BS and political!
On Aug 01 10:38 AM tonym wrote:
> "Finally, the real economic impact is actually a boon insofar as
> it leverages the purchase from the consumer four or five to one at
> minimum, produceing local sales tax, jobs, distribution, recycling,
> future warranty work etc. I think your article is politically motivated,
> untruthful, and flat out wrong. "
>
> Presenting valid numbers is not "political." This program might have
> benefits for our struggling economy. Incentives are a good idea.
> But the cost of this program is excessive like most government interference.
> Debt is going to destroy the government itself as it is doing in
> California. Those benefits could easily be duplicated by significant
> tax deductions for purchasing the new vehicles.
He meant low "gas"-mileage cars, not low "odometer"-mileage cars. Can't you people figure anything out for yourselves rather than commenting before giving it a little thought?
On Jul 31 01:43 PM dancingdad wrote:
> His arguments are like the ones Bush made going into Iraq. First
> note he said 200,000 low mileage cars are traded in a normal 3 month
> period. ( I'm willing to bet a large percentage of the clunkers coming
> in are high mileage ones.) He then assumes that all the clunker cars
> replace all the normal trades (bad assumption). His faulty logic
> leads him to conclude that 222,000 clunkers - 200,000 normal trades
> so we get 22,000 additional trade activity for $1B. All wrong, all
> worst case assumptions.
On Aug 02 09:41 PM BuyABizInFlorida.com wrote:
> The author is inferring that Edmunds is stating that 200,000 cars
> would be traded in and assumes that they are all "clunkers". However,
> we do not know to what extent they are clunkers, nor do we know that
> they are replace with Government mandated qualified replacements.
> So inferring that they are all clunkers and are all replaced with
> qualifying units that would have taken place in the ordinary course
> of events, we the tax payers are subsidizing these trade-ins that
> would normally occur.
>
> What is "BS" is the actual financial intelligence of the average
> American.
The key word here is normally. Cash for clunkers was passed in non-normal times. It would have been better to find out the low mileage car trade ins for the 4 quarters prior to cash for clunkers and the quarters with cash for clunkers active.
Also just getting the public thinking and talking about getting a new car has to help the auto industry.
If the government is going to do something, I much prefer positive incentives versus mandates.
People, don't feed the bots. They're not here to learn, understand words like marginal or opportunity, just to clog the discussion board.
And now .... watch this message get whacked by the Bots.
On Jul 31 01:43 PM dancingdad wrote:
> His arguments are like the ones Bush made going into Iraq. First
> note he said 200,000 low mileage cars are traded in a normal 3 month
> period. ( I'm willing to bet a large percentage of the clunkers coming
> in are high mileage ones.) He then assumes that all the clunker cars
> replace all the normal trades (bad assumption). His faulty logic
> leads him to conclude that 222,000 clunkers - 200,000 normal trades
> so we get 22,000 additional trade activity for $1B. All wrong, all
> worst case assumptions.
/facepalm
On Aug 01 11:38 AM W.E. Heasley wrote:
> Excellent article! Very good points. Great analysis.
>
> However, the article has become a chapter from Math Quest.
>
> It was a leap of faith on your part that paragraphs 2 through 5 would
> be an easy transition for non-Economists. A link within the article
> to information regarding Marginal Analysis might have made the article
> more understandable to non-Economists. Then again, maybe not.
>
> Apparently “at the margin” is not something readily understood. Further,
> “opportunity cost” seems to be misunderstood.
>
> However, you are exactly correct in your Marginal Analysis within
> your article. You conclusion is correct as well.
>
> An extension to your argument might be that an exogenous agent has
> created Price Distortion (seekingalpha.com/symbol/p) which
> always distorts Demand and/or Supply. Distortion of price is poor
> economic policy.
As far as I'm concerned, this final point, the Price Distortion, should've been the main point being discussed here. Who in their right mind would ever trust a car salesman, (or for that matter, his /her boss), to be a purveyor of truth? This $4500 was added and built in to the price prior to our subsidized buyer’s arrival and we’re all discussing what a clever magic show Congress has entertained us with again.
www.sbabg.org/2009/08/.../
SBABG.org
On Jul 31 01:34 PM Philman wrote:
> You guys need to learn economics. You either didn't read the article
> or can't understand the concept being discussed.
>
> The math is absolutely correct. The idea is that a certain number
> of cars/trucks would have been sold anyway - Edmunds says 200,000
> clunkers are traded in for fuel efficient vehicles EVEN WITHOUT GOVERNMENT
> SUBSIDIES!
>
> The cost to the government of a "stimulus" is NOT $3,500 - $4,500
> per car, because many buyers are getting the money even though they
> WOULD HAVE BOUGHT ANYWAY, without the program.
>
> At $4,500 per extra car, the program costs the government $45,354
> for each extra sale, above those that are normally sold anyway, exactly
> as the article states.
Your wonderful "cap and trade" will really screw the people who have no or little money as energy in all forms will rise in cost and they can least afford to pay those new taxes. All because of a few idiots who mistake CO2 as the cause of global temperature change when sun spots actually cause this cycles naturally. If cap and trade and the healthcare plan both pass, we will be permenantly in a recession or a depression. THANK YOU LORD OBAMA, OUR NEW DICTATOR!
On Aug 03 08:09 AM YesYesYes wrote:
> When Bush gave a tax rebate (WHAT WHAT WHAT) you all applauded like
> crazy (GIVING ME MY MONEYBACK IS PRAISE WORTHY, THANK YOU JESUS.)
> Now when Obama does it - it is Socialism (seekingalpha.com/symbo...).
> Just like the Cap and trade. I believe that the Reagan admin started
> that with pollution controls and the Bushes followed through with
> the concept. Dems were skeptical at first but admitted that to some
> extent it worked. (STOP SMOKING POT.)
>
> But now - as soon as Obama want to use Cap and trade - the "conservatives"
> are all against it! ("SCARE QUOTES")
>
> It just goes to show that the Republicans have no real point of view
> - they just want to criticize the Dems no matter what. (NO MATTER
> YOU CRANK, paranoia!)
>
> Just Nattering nabobs of negativism! (POSITIVELY DELICIOUS!)
"Normally traded in" These are not normal times.
This program is a direct benefit to working people with good credit. We waste more money in Iraq in a week than the total cost of this program.
WD216,
Many Americans have "an anti-business mentality" because their interactions with business are unpleasant, unsafe, and unfair. Businesses deploy armies of lawyers against their customers, collude with one another to fix prices and limit service, exploit the employees who generate the revenue keeping the lights on, and buy legislation from Congress making it all legal and protecting the processes.
There is no doubt that the limited liability corporation is the economic organization best able to accomplish large projects lasting an extended period of time. But giving such legal enterprises access to Bill of Rights protections was stupendous folly. Sure, they need access to courts and court procedures as a "person" in order to defend themselves against torts and to initiate them against one another in order to protect their contract rights. But they should not be assumed to have the POLITICAL rights guaranteed by the first ten amendments (free speech, petition of grievance, bearing of arms, and so on).
Since we don't have the initiative at the Federal level I have no idea how to correct this one hundred and thirty year old catastrophe, but it is the root of most of the distortions that afflict our democratic republic today.
On Jul 31 01:39 PM WD216 wrote:
> If those are the correct numbers, then is program costing $1 billion
> and 22,000 vehicles were sold, then the $45,000 per vehicle is correct.
>
>
> However more importantly, are the lines, "This government is, unfortunately,
> a reflection of the current state of economic immaturity that prevails
> in America. The vast majority of people, including most people in
> Congress, do not understand the forces that drive the real economy"
>
>
> Brilliant lines, they sum up the entire mess. We have a bunch of
> good speakers in office that don't know their a*s from their elbow
> when it comes to the economy. The American people don't either as
> they have an anti-business mentality, learned mostly through our
> liberal education system.
>
> The country is going to come out of this recession, only because
> of the trillions that are being spent. However, within 2 to 3 years
> you will see disaster strike due to these same spending policies.
> Our problems will be much worse then. This all due to ignornat Americans
> electing people that speak well.
Mud Engineer,
What foolishness; the people buying these new cars are not poor. The government is not buying the car for them, lock, stock, and barrel. It is basically providing a bigger trade-in allowance on guzzlers worth less than $4,500; most buyers still have to take out a loan. It's just somewhat smaller than it would have been.
Nobody whose car is worth more than $4,500 trade in is going to participate; if they were going to buy anyway, they'll take the trade-in offered by the dealer. I hope you're able to understand that.
Because of this there will be an economic cost, paid by the buyers of relatively low-priced used cars over the next few years. The truth is that anyone who can afford a new car in this economy is probably already driving a decently running, reliable vehicle. Those worth less than $4,500 are being trashed irrevocably and removed from the pool of available used vehicles. While that's a bit of a fuel economy and emissions benefit, it is an economic cost for people who are struggling anyway.
So in fact the people who you so hate -- the "losers" of society who "don't have to pay taxes or even get a so called tax refund -- will be the ones most hurt by this program, since reliable used cars will rise in price.
I surprised you aren't cheering their comeuppance, Ebeneezer.
On Aug 03 11:35 AM MudEngineer wrote:
> This cash for clunkers program "is not a tax rebate". This is taking
> money from the people who pay taxes and giving it to the people who
> make so little money that they don't have to pay any taxes and may
> even get a so called tax refund even though they paid no taxes.
> That my friend is exactly "socialism".
>
> Your wonderful "cap and trade" will really screw the people who have
> no or little money as energy in all forms will rise in cost and they
> can least afford to pay those new taxes. All because of a few idiots
> who mistake CO2 as the cause of global temperature change when sun
> spots actually cause this cycles naturally. If cap and trade and
> the healthcare plan both pass, we will be permenantly in a recession
> or a depression. THANK YOU LORD OBAMA, OUR NEW DICTATOR!
I could care less about Bush. He's gone, and he didn't do much of anything because of the gridlock in Washington. As it turns out, gridlock is the best policy.
On Jul 31 01:43 PM dancingdad wrote:
> His arguments are like the ones Bush made going into Iraq. First
> note he said 200,000 low mileage cars are traded in a normal 3 month
> period. ( I'm willing to bet a large percentage of the clunkers coming
> in are high mileage ones.) He then assumes that all the clunker cars
> replace all the normal trades (bad assumption). His faulty logic
> leads him to conclude that 222,000 clunkers - 200,000 normal trades
> so we get 22,000 additional trade activity for $1B. All wrong, all
> worst case assumptions.
Citizen A, let's call him the Ant, saves his money, buys smart, and owns a car that already gets more than 18 mpg. Thanks to his foresight and frugality, it's held its value rather well.
Citizen B, let's call him the Grasshopper, ran out and bought a Hummer when they first came out with no money down and a 60-month loan 'cause it made him look cool. Its value fell like a rock.
Today, Ant gets no tax incentive / free handout from his fellow taxpayers because he bought intelligently. Grasshopper (via the government) gets to take money out of Ant's pocket to dump his early-model 12 MPG Hummer and to subsidize his latest folly (as long as it gets better than 18 MPG.)
Ain't social engineering and corporate welfare fun -- as long as it comes out of someone ELSE'S pocket?
Ford raised rebates to match the $4500.
GM raised rebates to match the $4500.
Chrysler raised rebates to match the $4500.
Buying an F-150 under the cash for clunkers program equates to purchasing the same truck in 1994 for the same price.
Please make sure of your facts before you comment. I'm tired of liberal drival being tossed out without back up and asking us to believe you hands down. My source? KBB.COM and 28 years in the car business.
On Aug 03 10:53 AM 75 Year Old Citizen wrote:
> Gee Funny thing is before this Progarm Dealers where offering $4
> to $6 thousand factory rebates , those have Disappeared , the PRICE
> NOW is the Same as 6 months ago , in fact dealers are Raisng prices
> at my local dealers. , Used cars have gone way up too as there wont
> be any after trade ins are crushed , my eighbors traded in a beautiful
> 2000 truck to the progarm , idiots I wouda give them $7K for it had
> i know , it only had 86K miles on it . This is Justa nother example
> of the STUPID Progranms Gov comre up with .
Therefore, more efficient cars will lower government revenue.
Let's say every car purchased under cash for clunkers is 2x as efficient. Then, according to our mathematical and statistical manipulators (I mean, genius'es) , we'll see a 50% reduction in gas tax revenue over the life of the car.
Pulling out my SWAG slide rule, that comes out to a cost of over 250,000$ per car.
Clearly, we need less efficient cars if we want to "save our grandchildren from the vast debt we are creating".
Disraeli was right , "there are lies, damn lies and statistics".
Thanks.
On Aug 03 10:36 AM MudEngineer wrote:
> All the Government is doing is accelerating auto sales that would
> have occurred anyway in the short term future. Most very high mileage
> cars or trucks are close to being worn out and they would have been
> traded in within two years anyway. What did we gain by this? Remember
> all the manufacturer rebates that got people to trade in their cars.
> The sales went all the way up to 16 million and then when everyone
> who could actually afford a new vehicle had already bought one, sales
> plummeted to less than 10 million. We are doing the same thing with
> this clunker program and setting up for even poorer auto sales in
> the near future. What an incredible waste of my taxpayer money.<br/>
My store took in 56 Clunkers. The average credit score was 706. The average income (only was able to verify 35 sources since the others paid cash) was over 125,000 per year.
Yes, this was for the poor. Afterall, Obama already said that the rich are those that make $250,000.01 or more.
<sigh> Please get your facts correct. Dont just regurgitate the liberal media's spin. Thanks.
On Aug 03 11:35 AM MudEngineer wrote:
> This cash for clunkers program "is not a tax rebate". This is taking
> money from the people who pay taxes and giving it to the people who
> make so little money that they don't have to pay any taxes and may
> even get a so called tax refund even though they paid no taxes. That
> my friend is exactly "socialism".
>
> Your wonderful "cap and trade" will really screw the people who have
> no or little money as energy in all forms will rise in cost and they
> can least afford to pay those new taxes. All because of a few idiots
> who mistake CO2 as the cause of global temperature change when sun
> spots actually cause this cycles naturally. If cap and trade and
> the healthcare plan both pass, we will be permenantly in a recession
> or a depression. THANK YOU LORD OBAMA, OUR NEW DICTATOR!
grandchildren. Just a rough estimate will do, because we're
not out of there yet. And note, we don't know that we bought
anything more than a temporary lull in the hostilities.
So what is the Cash For Clunkers costing in comparison?
A few months worth of a long Iraqi war, perhaps?
Sunny Guy
On Jul 31 01:46 PM update wrote:
> This SCAM is costing my great grand children the interest payment
> on a BILLION, soon to be THREE BILLION DOLLARS.
>
> Boy those unions bought Obama but good.
>
>
> Do you stinking liberals get it?
Whaffle,
You are SERIOUSLY computationally challenged. Even if one of the newly purchased cars goes 300K miles and is at the extreme low end of the allowable mileage range (23 MPG = the 18 MPG max for eligibility of the trade-in plus 5 MPG minimum improvement for the $3,500 rebate), it will use 13,050 gallons of gas in its lifetime. Most vehicles don't go 300K and most of those bought will get more than the legal minimum for the program, but let's assume the worst case scenario. Any higher mileage vehicle will pay less in Federal fuel taxes over the life of the vehicle.
The Federal fuel tax is 18.4 cents per gallon, which is a total tax payment of exactly $2,400 over the life of that worst case new vehicle. That is ONE PERCENT of what you claim. And that's not even the DIFFERENCE between the new and old cars. If indeed the difference is only the minimum of 5 MPG (the "Clunker" gets 18 mpg) the loss in Federal fuel taxes is only $652.50. That is the minimum that the fuel tax will lose over the life of a 300K mile vehicle.
Now lets look at your "worst case" scenario. Say the traded in vehicle gets 15 mpg and the new one gets 30. That is 10,000 gallons of gas over the new vehicle's 300K mile life or $1,840 in Federal fuel taxes. Assuming that the 15 mpg vehicle could last another 300K miles -- unlikely at best -- it would have consumed 20,000 gallons of gas and paid $3,680 in fuel taxes.
That is a difference of $1,840.
How about if the old vehicle gets 10 and the new one 30? The old vehicle would have paid $5,540 in fuel taxes and the new one will still pay $1,840 for a difference of $3,680.
Let's be really bizarre and assume you're trading in a Dodge Ram 7 liter crew cab and buying a Prius. I don't know exactly what the Ram would get but if we assume you were a idiot and didn't get it with a diesel, it would probably be in the seven to eight mpg range. If 7 mpg and it made it another 300K miles it would consume 42,850 gallons and pay $7,886 in Federal fuel taxes. The Prius is rated at about 50 combined, so it would consume $6,000 in gasoline, paying $1,104 over its lifetime. Even this completely implausible scenario would cost the fuel tax fund only $6,782, about 2.7% of what you mooted.
Think before you type. Also, you might want to change your alias to "Whiffle" in honor of the ball that packs no punch.
On Aug 03 01:32 PM Whaffle wrote:
> Using cars generates gas/road tax money.
> Therefore, more efficient cars will lower government revenue.
>
> Let's say every car purchased under cash for clunkers is 2x as efficient.
> Then, according to our mathematical and statistical manipulators
> (I mean, genius'es) , we'll see a 50% reduction in gas tax revenue
> over the life of the car.
> Pulling out my SWAG slide rule, that comes out to a cost of over
> 250,000$ per car.
>
> Clearly, we need less efficient cars if we want to "save our grandchildren
> from the vast debt we are creating".
>
> Disraeli was right , "there are lies, damn lies and statistics".
My bad. Not "$6,000 in gasoline" in the part about the Prius, but "6,000 gallons of gasoline".
On Aug 03 02:06 PM Anandakos wrote:
>
> Whaffle,
>
> You are SERIOUSLY computationally challenged. Even if one of the
> newly purchased cars goes 300K miles and is at the extreme low end
> of the allowable mileage range (23 MPG = the 18 MPG max for eligibility
> of the trade-in plus 5 MPG minimum improvement for the $3,500 rebate),
> it will use 13,050 gallons of gas in its lifetime. Most vehicles
> don't go 300K and most of those bought will get more than the legal
> minimum for the program, but let's assume the worst case scenario.
> Any higher mileage vehicle will pay less in Federal fuel taxes over
> the life of the vehicle.
>
> The Federal fuel tax is 18.4 cents per gallon, which is a total tax
> payment of exactly $2,400 over the life of that worst case new vehicle.
> That is ONE PERCENT of what you claim. And that's not even the DIFFERENCE
> between the new and old cars. If indeed the difference is only the
> minimum of 5 MPG (the "Clunker" gets 18 mpg) the loss in Federal
> fuel taxes is only $652.50. That is the minimum that the fuel tax
> will lose over the life of a 300K mile vehicle.
>
> Now lets look at your "worst case" scenario. Say the traded in vehicle
> gets 15 mpg and the new one gets 30. That is 10,000 gallons of gas
> over the new vehicle's 300K mile life or $1,840 in Federal fuel taxes.
> Assuming that the 15 mpg vehicle could last another 300K miles --
> unlikely at best -- it would have consumed 20,000 gallons of gas
> and paid $3,680 in fuel taxes.
>
> That is a difference of $1,840.
>
> How about if the old vehicle gets 10 and the new one 30? The old
> vehicle would have paid $5,540 in fuel taxes and the new one will
> still pay $1,840 for a difference of $3,680.
>
> Let's be really bizarre and assume you're trading in a Dodge Ram
> 7 liter crew cab and buying a Prius. I don't know exactly what the
> Ram would get but if we assume you were a idiot and didn't get it
> with a diesel, it would probably be in the seven to eight mpg range.
> If 7 mpg and it made it another 300K miles it would consume 42,850
> gallons and pay $7,886 in Federal fuel taxes. The Prius is rated
> at about 50 combined, so it would consume $6,000 in gasoline, paying
> $1,104 over its lifetime. Even this completely implausible scenario
> would cost the fuel tax fund only $6,782, about 2.7% of what you
> mooted.
>
> Think before you type. Also, you might want to change your alias
> to "Whiffle" in honor of the ball that packs no punch.
>
> On Aug 03 01:32 PM Whaffle wrote:
Captain, captain... Bubble ahead!!!
On Aug 03 02:06 PM Anandakos wrote:
>
> Whaffle,
>
> You are SERIOUSLY computationally challenged. Even if one of the
> newly purchased cars goes 300K miles and is at the extreme low end
> of the allowable mileage range (23 MPG = the 18 MPG max for eligibility
> of the trade-in plus 5 MPG minimum improvement for the $3,500 rebate),
> it will use 13,050 gallons of gas in its lifetime. Most vehicles
> don't go 300K and most of those bought will get more than the legal
> minimum for the program, but let's assume the worst case scenario.
> Any higher mileage vehicle will pay less in Federal fuel taxes over
> the life of the vehicle.
>
> The Federal fuel tax is 18.4 cents per gallon, which is a total tax
> payment of exactly $2,400 over the life of that worst case new vehicle.
> That is ONE PERCENT of what you claim. And that's not even the DIFFERENCE
> between the new and old cars. If indeed the difference is only the
> minimum of 5 MPG (the "Clunker" gets 18 mpg) the loss in Federal
> fuel taxes is only $652.50. That is the minimum that the fuel tax
> will lose over the life of a 300K mile vehicle.
>
> Now lets look at your "worst case" scenario. Say the traded in vehicle
> gets 15 mpg and the new one gets 30. That is 10,000 gallons of gas
> over the new vehicle's 300K mile life or $1,840 in Federal fuel taxes.
> Assuming that the 15 mpg vehicle could last another 300K miles --
> unlikely at best -- it would have consumed 20,000 gallons of gas
> and paid $3,680 in fuel taxes.
>
> That is a difference of $1,840.
>
> How about if the old vehicle gets 10 and the new one 30? The old
> vehicle would have paid $5,540 in fuel taxes and the new one will
> still pay $1,840 for a difference of $3,680.
>
> Let's be really bizarre and assume you're trading in a Dodge Ram
> 7 liter crew cab and buying a Prius. I don't know exactly what the
> Ram would get but if we assume you were a idiot and didn't get it
> with a diesel, it would probably be in the seven to eight mpg range.
> If 7 mpg and it made it another 300K miles it would consume 42,850
> gallons and pay $7,886 in Federal fuel taxes. The Prius is rated
> at about 50 combined, so it would consume $6,000 in gasoline, paying
> $1,104 over its lifetime. Even this completely implausible scenario
> would cost the fuel tax fund only $6,782, about 2.7% of what you
> mooted.
>
> Think before you type. Also, you might want to change your alias
> to "Whiffle" in honor of the ball that packs no punch.
>
> On Aug 03 01:32 PM Whaffle wrote:
On Aug 03 04:12 AM Jean-Paul Renoir wrote:
> This is exactly what the British government had concluded years ago
> when they studied the French and Italian programs,before considering
> one themselves. None of this is out of the box thinking ,and merely
> underlines the demagoguical nature of the curent government.Same
> with healthcare, why don't they invite British, French,and Canadian
> healthcare administrators, before trying to reinvent a faulty wheel.
On Jul 31 04:29 PM Budman 72 wrote:
> Simple math skills show the numbers. If we increased the quarterly
> sales volume(200000) by 22,000 units under the $4500 rebate then
> the govt. just spent a billion dollars to gain the additional 22,000
> sales. 1 billion divided by 22,000 units is $45,354. Same scenario
> at $35000 hundred dollar rebate. The basic problem is the government
> should not intercede in natural economic events. Eventually the free
> economy will correct itself and then the government threw our(taxpayer)
> dollars at a meaningless activity.
On Jul 31 04:30 PM KingGeithner wrote:
> Well, then I don't want to help pay for your kid's education, or
> the roads you drive on, or any other service you use from the government
> that I may not be using either.
1) He excludes the immediate increase in sales taxes generated.
2) He assumes that all the cars would have been sold anyways, probably half would not according to the American Enterprise Institute.
3) This creates a very significant drop in gas consumption which of course helps reduce our trade imbalance, fuel imports, carbon emissions, and improves the productivity and savings of the vehicles owners (thus an increase in wealth). Note that Ford said the most common car on a trade-in is Ford Explorer and the most common cars our are compact cars.
4) The older cars pollute many times more than newer ones and really old ones can pollute up to 100 to 200 times more than new ones. This accounts for a great deal of air pollution and helps cities stay within bounds of clean air laws and saves them a lot of money.
5) This is actually far more effective in promoting conservation than subsidizing Hybrids like the Prius.
6) New cars also tend to have better safety features which can help reduce road fatalities.
7) There is a knock-on effect of the rebates throughout the economy and most economists will tell you this is one of the most productive ways to stimulate the economy. Promoting energy conservation is almost always cheaper than promoting most renewable energy solutions (especially at the residential level) according to studies by McKinsey, CleanEdge, and many others.
I would politely suggest not to base your argument on anecdotal evidence. What you would do is not necessarily representative of millions of people.
On Aug 03 01:00 PM LouieK wrote:
> What we are talking about is the marginal boost in the economy due
> to a government program: the marginal boost is 22,000 vehicles and
> the cost of that boost is $20K to $45K per vehicle to the government.
> AND, those 22,000 vehicles would have been replaced over a period
> of time anyway. I have a 1999 Windstar that is past its prime because
> we are out of our soccer mom phase, so the program just subsidizes
> what I would have done soon anyway. And when they destroy the Windstar,
> those going into that phase will be faced with a higher price for
> used mini-vans, forcing more people to pay more precious, personal
> resources for their family needs on a mini-van. Even if they buy
> a new van, the increasing price of the old ones will dampen their
> ability as consumers to negotiate with the auto dealerships for lower
> prices on the new ones. So the program helps me and hurts the new
> families. Those incoming families probably voted for Obama, the saps.
Just from my observations, I work at a place where about 600-700 people worked, and I can assure you that over the last 4-5 years, the majority of the people that I saw buy new cars would never have had a clunker to turn in,,,,they always bought a new car long before they really had too,,,,thus they did not have a clunker to trade in.
The people I knew that drove clunkers would almost always trade in the clunker on another newer used car (a used car???? hmmm maybe these people driving older clunkers can't usually afford new cars).
So I really believe a good deal of these people that traded in the clunkers for a new car would not have done that if not for the incentives
with socialist ideology. Money doesn't just magically appear at the treasury department (though it semms to at the Fed!). Each dollar you spend on "stimulus" must come from somewhere, and currently it comes from Asia, and it comes at a cost. If this program makes so much economic sense why not expand it? Let's give all new car purchasers $20,000 in rebates, and why not give all home purchasers $100,000 to buy a home? Soon the entire economy will be growing like gangbusters! Right. We'll just end up in the same mess we're in now as soon as China takes away the treasury's credit card. If the average citizen is in debt, how will the government going deeper into debt make the problem better? Those that support this type of economic program are under the impression that a dollar in stimulus yeilds a dollar+ in output. This is only true for a short time. As in our example, the economic boost provided by the cash for clunkers program will stop as soon as the program is over. If there is no underlying economy, boomtowns become ghostowns as soon as the gold runs out. Now listen closely - it's a mathematical fact that OVER TIME a dollar in stimulus ALWAYS yeilds less than a dollar in output. Only a dollar in investment can yeild a dollar+ in real output and a positive return is not a certainty.
The myopic focus on short-term stimulus without accounting for any offsetting future financial penalty, only government cheerleading, displays a lack of any serious critical thinking.
On Aug 01 11:21 AM Marvin Clark wrote:
> This is a poorly thought-out, slanted argument conflating economics
> with political ideology. The suggested $20,000 - $45,000 suggested
> cost per transaction wildly inflated and is disingenuous.
>
> Furthermore, cars do magically materialize into showrooms. They are
> transported from manufactures to dealers, creating jobs. They are
> detailed before being delivered, creating jobs. Salespeople are paid
> commissions; finance workers and offices workers process paperwork,
> creating jobs. Taxes are paid on new transactions. New cars aren't
> purchased and parked in garages. New owners take them out on the
> road and drive them. New owners drive to dinner, visit friends and
> family; take quick trips. They test drive their new purchase. The
> velocity of money increases. By the way, this is the point of the
> program.
>
> We can debate the politics of spending money this way, but to state
> each car purchase can cost up to $45,354, without honestly accounting
> for any offsetting financial benefits, only government bashing, displays
> a lack of any serious critical thinking.
> Cynical and paranoid people think that all of those orange barrels
> are just there to slow the traffic down so you can burn more gas
> to offset the losses to the Highway Trust Fund from CAFE standards.
>
Since the government essentially owns General Motors, what we have is the spectacle of a business owner using government to rob taxpayers for what may be at best a 1 - 2% increase in its sales.
Perhaps Obama, Pelosi, and Reid have decided "What's good for General Motors is good for the nation."
On Jul 31 01:22 PM pedrom wrote:
> I believe he's quoting the cost for "incremental" sales.
> Example: person trying to trade in minivan with >100,00 miles that
> was only worth $1,000 for a new vehicle. It get's his only smoker
> off the road, he gets into a clean and safe car, a car gets sold
> so the dealer and car company make money, the factory workers get
> to build a replacement and all the suppliers get to build all the
> parts. Also along the way the Gv't charges taxes on the sales, salaries
> etc... Short term it is an expensive program but at least real taxpayers
> are getting some benefit that is also good for the economy with some
> benefits for the ecology.
Go to AuthorityResearch.com JBS.org NRCSAVESHOMES.org the White house web site to see the FAKE Obama Birth Certificate read both the pro and con obama books with an OPEN mind - SEE the TRUTH and pass it on!
Larry LEHenson@msn.com think before emailing me....
Is the author using worse case scenario in his analysis?
Obviously, but at least it's based on the best available numbers.
The government is using total fantasy numbers.
They are assuming zero cars would be traded in if not for them.
They (congress) are all patting themselves on the back for having thought up such a "successful" program.
All it really that it really amounts to is another Government bailout of Detroit, and a $4500 per vote purchase for the next election.
Oh, and maybe - maybe we increased the number of cars that are traded in by 5 or 10%. (Or maybe, we just moved the trade in from next year to this year.....)
When are voters going to wake up to the fact that these politicians are crooks and lying thieves who only care about themselves.
We need to go back to the system where you can't vote unless you
1) Are a landowner
2) Are a taxpayer
3) are a member or ex member of the military
At least then, voters have "some skin in the game" as it's called, and will care about what Washington does with the money they take.
There are statistics, damned statistics, and outright lies. This article/blog and the Edmonds report it quotes are all three.
Nobody has noted neither mentions the time frame that quarterly normal average figure of 200,000 comes from. Was it 1-year? 5-years? 10-years?
I've no doubt the figures for the 2-3 quarters immediately prior to this program being passed and enacted were a damned sight lower than the 200,000 quoted.
This article/blog and the Edmonds report it quotes should have come from the Fox network or some other Murdoch mouthpiece. Oh, wait. Is Avery on retainer?
SPLF
online.wsj.com/mdc/pub...
SPLF
On Jul 31 04:30 PM KingGeithner wrote:
> Well, then I don't want to help pay for your kid's education, or
> the roads you drive on, or any other service you use from the government
> that I may not be using either.
On Aug 01 04:31 PM Mad Hedge Fund Trader wrote:
> Better get yourself a new abacus. Perhaps it was the newspaper gene
> in me that made me screech my car to a halt when I saw a near riot
> in progress at my local total Toyota dealer. The showroom was more
> jammed than the unemployment office, with eager salesmen recalled
> from vacations manning card tables set up in every available space.
> I managed to grab one peripatetic salesman by a lapel, who gushed
> that they sold 45 cars yesterday, compared to ten for a normal Friday,
> and that 35 of these were due to the Cash for Clunkers program. Sure
> I could get a $4,500 credit for my 1995 BMW (17 mpg), and apply it
> to a new Prius (50 mpg), taking the price down to $19,500 and the
> monthly payment to $450/month for five years. In fact, the government
> stimulus program was so successful, that it ran out of money in the
> first four days, and congress rushed to triple it to $3 billion on
> Friday. It was like the survivors of a ship torpedoed at sea were
> swimming frantically for the only piece of wreckage that floated.
> Assuming that the average car drives 10,000 miles a year, and the
> average swap generates a mileage improvement from 15 mpg to 27 mpg,
> junking 750,000 clunkers will save 30 million barrels of crude a
> year, 1.5 days of our total annual consumption, or three days of
> imports. I asked to see the cars that were traded in and was told
> that the lots for the dealer, the used cars, and the detailer were
> all full, but I could see some if I went to the Target nearby where
> they were renting extra spaces. There I saw the fleet condemned to
> clunkerdom, GM Safari’s, Jeep Cherokees, Buick Regals, Dodge Ram
> pickup trucks and vans, and Chrysler minivans by the dozen, all
> with “CFC” marked on their windshields, a certain death sentence.
> These sorry excuses for transportation will never belch blue smoke,
> nor drip oil on our interstates again. I can’t imagine a sorrier
> commentary on the management failure of the US car industry for the
> last 30 years.