Cash for whom? Clunkers program a lemon

As predicted, "cash for clunkers" was a colossal economic failure.

Back when it was proposed, many economists and auto industry anaylsts predicted that the program would primarily shift auto purchases from the fall and winter to the summer. Edmunds.com, perhaps the most respected of auto analysts, sounded that warning earlier this year. Last week, Edmunds concluded that this is exactly what happened.

Analyzing sales data nationwide, Edmunds estimated that all but 125,000 of the 690,000 vehicles sold through "cash for clunkers" would have been sold anyway.

What that means is that instead of an average taxpayer cost of $4,000 per vehicle, as the Obama administration claims, the program's actual cost was $24,000 for each vehicle that otherwise would not have been sold.

And what did all that cash buy the American people? Detroit and the White House say it boosted auto production and stimulated the economy when it needed the most stimulating. But think about that.

The government paid people $226 billion to buy cars in the summer instead of later in the year.

Another $74 billion was paid to people to get them to buy a new car instead of a used one or none at all. Almost all of that purchasing would have happened at some point anyway. So what did the $3 billion really get us in the long run? Nothing.

Making matters worse, that money was borrowed, meaning we will pay interest on it for decades.

So to keep a somewhat higher number of auto workers busy during the summer, we will be paying China for years and years to come.

A more accurate name for the program would have been "cash for China." But if there's one thing Barack Obama is good at, it's coming up with phrases that make really terrible ideas sound great.

http://unionleader.com/article.aspx?hea ... f50c7bd2ef