Aug 1, 2009

"cash for clunkers" people WILL line up for "free money"

Last today, the "cash for clunkers" program has already run out of money. Under the legislation that created the program, Congress could authorize another $3 billion for clunker rebates around the country. Until then, the program is  "There is a BIG problem with the 'cash for clunkers' program!" exclaims a reader. "The only people that are eligible for it are the rich and stupid! Like the idiot that bought a Cadillac or Lincoln with a big V-8 engine. They get 16 miles a gallon, and if they trade it in on the identical car now that gets 20 mpg (The required 4 mpg increase), they save 20% in fuel consumption.
 
"Now, if this program were to be effective and fair, it should have no limit on the mpg of the clunker, only a percentage of the fuel saved. They should also include the people that drive a sensible car (getting 25 mpg for a compact) that trade in for a fuel-efficient car (Toyota Prius that gets 50 mpg). That trade would reduce fuel use not by 20%, but by 50%.
 
"What madness," writes the last -- this one our favorite. "The central planners have established a program in which significant wealth (the cars and trucks, most of which are fully functioning) of a society is junked to stimulate demand for products from a government-owned business. This is reminiscent of some of the silliness that issued from the Cultural Revolution. Oh, did I mention we are borrowing the money to pay for it?"

Have a nice weekend,
Ian Mathias