danno

Cash for Clunkers May Cost Up to $45,354 Per Vehicle

Hey Louie K:

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.

Cash for Clunkers May Cost Up to $45,354 Per Vehicle

This guy is a bozo.
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.