Most Americans wouldn't know it, but the Cash for Clunkers model originated in Europe in the mid-1980s. The idea was two-fold:
(1) get high-polluting and fuel-guzzling "clunkers" off the road and
(2) stimulate new car sales. It was called "Prime à la Casse."
Over the years, European governments with large national production (Germany, Italy, Spain, the United Kingdom) implemented similar programs, and even states with little if any production (Luxembourg, Ireland) joined in, says Victor Dial, former chairman and general manager of Ford France.
When the Cash for Clunkers program started in America in 2009, Dial admits he was surprised at the almost immediate outcry from economists, pundits and, yes, citizens, denouncing it as wasteful. They were, of course, right: It pulls forward new car sales, but it also scraps perfectly good, serviceable vehicles, thus lowering supply and driving up used-car prices, says Dial.
Read more at NCPA
Also see Cash for Clunkers cost taxpayers $24,000 per vehicle sold of 625,000 cars sold through Cash for Clunkers...Duke University helps you Do the math
Watch full of Unintended Consequences here by inflation.us