Free Markets, Free People


“Cash For Clunkers” Is A Clunker To This Point

What got us into the financial mess we’re in today? Well all the experts and economists tell us it was overspending and debt.

So what’s the solution? Why encouraging more consumer overspending and debt incentivized with your tax dollars of course.

I’m speaking of the “Cash for Clunkers” program – a $1 billion dollar government program that gives a $3,500 to $4,500 cut in price, obviously subsidized by your taxes, to owners of old “gas guzzlers” that meet a certain criteria as an incentive to go into debt for a new more fuel efficient and environmentally friendly car.

You say a billion bucks in the big scheme of things isn’t much. Of course that’s not the point. The government has no business giving your tax dollars away to subsidize someone else’s car purchase. None.

And here’s another point to consider:

But dealers reported problems with the government’s online system to get the transactions approved by the National Highway Traffic Safety Administration (NHTSA), which is running the program.

Scott Lambert, vice president of the Minnesota Auto Dealers Association, said he was “astounded” to learn at a meeting Tuesday representing about 150 Minnesota dealers that not one has had a deal approved.

“We had dealers representing 1,500 to 2,000 transactions,” he said. “We asked how many had a deal approved yet, and not one hand went up.”

Lambert said the government has created a program that’s “so big and cumbersome that it can’t find a way to accept anything. We’re sending in good, reliable deals.”

It’s nerve-racking for the dealers, he said, because they have given the customer $4,500 and now the dealers need to be reimbursed.

This is a crummy little billion dollar program that began July 1st and the government (why is the NHTSA in the car business?) has yet to figure out how it is supposed to work and how to reimburse dealers who’ve apparently followed their guidelines and laid out hundreds of thousands of their own dollars in anticipation of being reimbursed by the government.

In the meantime, what government has managed to create is a giant and apparently unresponsive bureaucratic mess.

And this is the crew you want running your health care?

All I can say to the dealers is you should have known better.

~McQ

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22 Responses to “Cash For Clunkers” Is A Clunker To This Point

  • We have people in power who believe that they could outlaw gravity …
    SEC. 1. ENDING GRAVITY ABUSE.

    (a) Clarification Regarding Application of Law of Gravity (“What goes up, must come down”) is amended–

    (1) after “must”, by inserting “complete forms 122 and 256 explained in Section 235(c) before being allowed to”

     

  • This program is just another thing to piss me off, every time I see the commercials I ask why the government is subsidizing automobile purchases (or why the Senate cares about steroid use in professional sports, or why the House has any business discussing the NCAA championships)
    All of this shirt has to be payed for, get everyone thinking in the “free government money” giveaway mentality and what little isn’t already circling the rim of the bowl soon will be.

  • for a new more fuel efficient and environmentally friendly car
    Did you read the caption?  The guy’s trading in a 1993 F150 for a 2009 F150.  Same fuel efficiency.  The dealer and the customer are basically trying to steal money from the rest of us.

    • I don’t actually care if the guy gets better fuel efficiency with the new car, but likely the 2009 model is more efficient than the 90s model. The government has increased efficiency/smog standards. Besides which, as long as the deal meets the rules set down by the government, how is it stealing?

      The real theft is that the government is doing this in the first place.

  • Fuel efficiency standards have not increased since 1993 (which is partially why current legislation aims to increase them over time), and the F150s still get anywhere between 12 and 15 mpg, just like they used to be in the 90s.  You can check here:
    http://www.fueleconomy.gov/FEG/bymodel/bymakemodelNF.shtml
    I agree that it’s a stupid idea to have this program in place–though other car-producing countries have similar legislation in the current economic downturn to keep their domestic car industries afloat, so we’re really just trying to keep our companies on the same footing.  It’s made even more stupid, though, when you’re not even required to actually buy a more fuel-efficient vehicle at a time when we want to give car companies a break for requiring them to produce more of those vehicles.

  • For the last 15 years I have been driving the same vehilce that averages over 25 MPG. What do I get for being a good steward and using minimal resources? Nothing. My vehicle doesn’t qualify for the Cash for Clunkers program. My brother however is trading in his Yukon.

    Even according to liberal ideology this is screwed up. The frugal get nothing and the abuser gets the reward.

    • I should have mentioned my brother is trading in his “clunker” Yukon for another “new” Yukon.

  • coeruleus said this: “The dealer and the customer are basically trying to steal money from the rest of us.”
    +++++++++++++++++++++++++++++++++++++
    Wrong.
    Lots of herd members have been convinced to believe like you just admitted to believing.
    The money has ALREADY been stolen from you, and continues to be stolen from you everyday.
    Your ire should be on the thief that stole from you.
    Why is it not, and why are you blaming someone that hasn’t stolen from you?
    The F150 guy simply found a way to get back some of the money that was stolen from him.
    The person that harms your enemy is your friend.

     

  • Don said this: “Besides which, as long as the deal meets the rules set down by the government, how is it stealing?”
    ++++++++++++++++++++++++++++++++++
    So if the gov’t makes a rule that stipulates that if someone removes your Tivo from your home against your wishes it is not stealing are you OK with that?
    The greatest thief in all of history doesn’t get to change facts nor does it get to alter the meaning of words.

     

    • creative86 – “So if the gov’t makes a rule that stipulates that if someone removes your Tivo from your home against your wishes it is not stealing are you OK with that?”

      I just got my paycheck. Uncle Sugar and Aunt Bev (governor of our state) took 21% of it. I could have BOUGHT a Tivo for what the government took.

      Whether it’s your Tivo or a chunk of your paycheck, Uncle Sugar is in the stealing business. However, if you play your cards right, you can get some of that back… just like the guy who’s getting Uncle Sugar to help him buy a shiny new F150.

  • There’s only one tax-cheat in America, Uncle Sam. The rest of us are just trying to get our money back from him and keep him from stealing more.

    Can Congress be declared a criminal enterprise? There’s room at the Gitmo.

  • I believe the program has been suspended.

  • You’d be much better off if you constructed things so that the gov’t couldn’t take it from you in the first place.
    Yes, there are severe consequences for not willingly paying the thugs but the odds are in your favor if you are ever vigilant and use common sense.
    In the meantime you and your family get to reap the benefits of the efforts of your toil and the gov’t can go pound sand sideways.
    I don’t spend alot of time worrying about the criminal elements in the society but I do devote every waking moment to being aware that they are out there and will get me if I let my guard down.
    So be it, I only get one chance at this thing and I’ll do it my way or the highway.
    Onward.

  • It would be curious to see what the rate of reimbursement to the auto dealers ends up being. Does anyone suspect that maybe the government-owned carmakers end up coming out a little better?

  • Actually the part I like is the fact that they just realized that the program has 23,000 participants.  It is limited to 250,000 vehicles – now let’s do the math –
    1. That means each dealer has ~11 cars they can sell in the program.  I’ve seen reports of as many as 80 qualified sales at one dealer…
     2. As you saw just in MN they had ~2,000 transactions represented – and that wasn’t all of the states dealers…
    3. Historically 2008 saw ~730,000 vehicles sold in July… This report says that for 2009 the pace is for around 780,000 (an extra 50K units from the previous year or extra 150K from June) http://www.fi-magazine.com/News/Story/2009/07/New-Car-Sales-in-July-Indicate-Market-Deterioration-Slows.aspx

    The Government has just announced they are closing the program – what are the odds that everyone who ‘qualified’ will be approved – who gets screwed when the money runs out  (especially if it’s 3x the original estimate – the dealer who gave $4500 to a customer – the customer who budgeted a vehicle based on that $4500 or the tax payer… I pretty much know the answer to this…

    Not only was the program stupid but they couldn’t even manage it within 3x estimate – I think this error range should be used as the baseline for how far off all the current administrations estimates are… and I think most are off by more.

  • The real reason the government suspended ‘cash for clunkers.’ I’ve spoken with several dealers concerning the cash for clunkers program and this video sums up the “cash for clunkers” suspension in great detail. Watch: http://tinyurl.com/ml9sdo

  • Well, reports today are that the program is so popular that it’s already out of money, and there is hope to expand it.    That does help the auto industry, but your point about increased debt is valid.

  • Bill, they will honor all claims through this weekend — so dealers will be reimbursed.  After this weekend depends on Congress expanding the program.

  • Just a quick note… as if on cue – here is the call to triple the amount of money committed – that’s right the taxpayer takes the hit – with apparently more to come – let’s see at $3Billion/month how soon can we get to money that matters:
    http://www.msnbc.msn.com/id/32228179/ns/business-autos

  • Yeah, like you get anywhere with it. They tell you that your car/truck/SUV gives you at least 6-10 miles more per gallon than you know it does.