"Cash For Clunkers"

A lot of talk about the government's "Cash for Clunkers" program. Unfortunately, this program is another example of government waste and stupidity. The federal government has allocated 1 billion dollars to this rebate program. Which will continue until November 1st 2009, or until the money runs out.

If you forget about the ideological disagreement (govt's stimulus), the problems start with the moronic guidelines Congress hashed out.

In fact, many people with "clunkers" will not be eligible for this program. The "clunker" must have been built in 1984 or after, and at the time of purchase have a combined highway/city MPG of 18 or fewer. Lastly, they must have a blue book value of less than $3500

That means someone driving a 1989 Honda civic or a 1987 Subaru would not be eligible. This legislation is punishing individuals who have always made the intelligent choice--purchasing inexpensive, fuel efficient cars. In their purchase, these consumers saved the environment and their wallet by not borrowing too much money. However, these "smart" consumers are never rewarded for their actions. Both of these cars had far to high an MPG rating when they were bought. Therefore, even though an 89 Civic and 87 GL wagon might get fewer than 18 MPG now, the government will not give you any rebate.


However, if you bought a brand-new Ford Windstar Minivan in 1998 for roughly $25,000 you would be eligible.

What are they going to be eligible to buy? Anything, as long as the MPG is over 22 for cars, 18 for SUVs, and 15 for trucks.

What a great deal, Americans are already broke and now the government creates an incentive to put more debt on their balance sheets. Our country is incentivising the purchase of an SUV that gets 18 MPG. In reality, most SUVs (and cars) get fewer MPG than what is listed at the time of purchase.

This rebate deal will undoubtedly garner much attention in the mainstream media, as people go and buy new vehicles with their government rebate. I would expect all of the stories in newspapers and on TV to be essentially advertisements for an industry that has seen their sales disappear in the past 10 months. From what I have read so far, there is little analysis of the underlying issues.

If the government really wanted to get old cars off the road, they could make any car worth less than $3500 eligible. However, they don't follow rational thinking and instead continue the same subsidized consumerism that has led this country to the brink of disaster.