Cash for clunkers: Senate's turn (signal)

Since neither David Axelrod nor the Swamp will mention the opposing point of view, here's a Wall St. Journal article labeling the "Clunkers" program "crackpot economics", a program that destroys jobs as well as cars. See
http://online.wsj.com/article/SB10001424052970204313604574326531645819464.html

Myth: the "Cash for Clunkers" program is "extraordinarily popular".
Fact: the latest Rasmussen Poll shows that most people oppose giving more of their tax money to the Clunkers program. See www.rasmussenreports.com

The fact that people are taking advantage of the giveaway does NOT mean that they think the giveaway is a good idea.

And as Howard Kurtz of the Leftist Washington post observes, " how can the administration declare the clunkers program a success when a billion-dollar effort that was supposed to last till November ran out of money in five days? Isn’t that a pretty spectacular miscalculation?”

What an idiotic program. Haven't our so-called leaders learned yet that federal subsidies create bubbles that inevitably burst?

Even worse, dealers have begun to disable perfectly functional cars to make them qualify for this program. That kind of behavior is utterly irrational in any other context, and illustrates the kind of behavioral distortions that are more characteristic of the old Soviet regime than twenty-first century America.

WSJ called it crackpot economics because "the subsidy won’t add to net national wealth, since it merely transfers money to one taxpayer’s pocket from someone else’s, and merely pays that taxpayer to destroy a perfectly serviceable asset in return for something he might have bought anyway." THis is as far as the WSJ goes before putting forward it's "opinion". The fact of the matter is the WSJ did not research into how this transfer of money and goods will effect the economy as a whole. Will it improve the employment opportunities for the auto industry employee on unemployment, probably,. Will it improve the environment, probably. Will it improve the overall economy by putting more money into circulation which before hand was being held and stagnating, probably.
It's probably a great program and probably should be continued. You can't prove it's hurting the economy short or long term and you can't prove it improving the economy either. It's "out of the box" thinking, much like a tax rebate check given by a former POTUS. THe checks didn't work but that doesn't mean this one, one involving the production and movement of durable goods, won't be a real positive.
And you don't need poll numbers to see that the program is, in fact, extremely popular.
Stop being whiners.

"Since neither David Axelrod nor the Swamp will mention the opposing point of view, here's a Wall St. Journal article labeling the "Clunkers" program "crackpot economics", a program that destroys jobs as well as cars."

The Wall Street Journal is controlled by its owner--Rupert Murdoch. Hardly a balanced, credible source. Your feeble attempts to manipulate Swamp readers will only work on those who are as lacking as you are.

The "Cash for Clunkers" program has given the auto industry a shot in the arm over the last week or two, but what's its longer term effect going to be?

One of the problems in the industry in recent years has been that its market is saturated. The industry has been force-feeding the market for years, with rebates, employee pricing for all, zero per cent financing, etc., in order to induce people to come and buy a car when otherwise they might not. That just borrows sales from the future; at some point, those sales have to be paid back. When the economy turns down, that point comes; everybody who might be in the market for a new car already has one, so a car purchase can be put off.

The "Cash for Clunkers" program just serves to temporarily lower the threshold to a new car purchase. Many of the cars being turned in to be scrapped are perfectly serviceable vehicles, with economic life left in them. (Look at the picture on the front page of Saturday's Tribune; lots of people with real clunkers would be happy to own and drive those cars.) When the time comes that those vehicles would have been traded in, absent the program, they won't be there; the owners will be driving newer cars. Again, sales will have been borrowed from the future.

The "Cash for Clunkers" program is like treating a heroin addict by shooting him up again. It just makes the ultimate withdrawal worse.

Great response to Bruce, Diane. You start with a guilt by association, then wind up with an ad hominem attack. It's a "twofer" in the logical fallacy pantheon!

Now, what do you think of the points raised in the WSJ article? You've been silent about those!

Why waste your time responding to a non-credible source ? Typical nonsense, by the riotous Republicans !! They have nothing better to offer, so they want thinking people to respond to mucky Murdoch's moronic mudslinging !! Good luck with that one, you, riotous Republicans !!
SUPPORT OUR TROOPS, BRING THEM HOME, ALIVE AND WHOLE. NOW.

Thanks for the comic relief, Don. Your posts are always good for a chuckle.

The program is so bad that the Obama administration is withholding information on it. See the AP story at http://www.breitbart.com/article.php?id=D99S6M481&show_article=1
for how Obama's people are once again ignoring their "transparency" pledge.

Another stealth government economic policy could help the Midwest.

See:

http://notionscapital.wordpress.com/2009/08/04/rust-belt-recovery-plan/

I’ve seen some people try to defend Obama’s ludicrous Cash for Clunkers program as something akin to a tax rebate or tax credit. This is rubbish, and betrays a dangerous misunderstanding of where government money comes from. A better understanding of basic economics would help Americans avoid the kind of snake oil salesmen currently running Washington. If the public school system won’t provide such an education, then it falls to conservatives to explain the basics, in order to build support among the voters for the policies necessary to repair the damage Obama’s madcap liberalism has wrought. We can use the Cash for Clunkers boondoggle to illustrate an important point about the relationship between freedom of choice and value. C4C doesn’t just waste money - like every instrument of central economic planning, it destroys value.
Cash for Clunkers is not a “tax credit” or “rebate” of any sort. In order to be either of those things, it would have to be restricted to those who paid the taxes in the first place. Furthermore, it would have to be awarded progressively, just as taxes are assessed progressively. The top 1% of wage earners pay about half of all federal income taxes, so half of a true “tax credit” would have to go to them. Something tells me we’ll never see a Cash for Jaguars program. Tax credits never work that way. When taxes are collected progressively, but credits and rebates are given in flat amounts - or weighted toward the lower tax brackets - the credits amount to more redistribution of wealth. If I pay twice as much in taxes as you do, but we both receive the same credit, the procedure amounts to a strikingly inefficient way to redistribute my money to you.
Cash for Clunkers doesn’t even have the pretense of being a tax credit. It’s a simple subsidy, in which taxpayers who aren’t selling clunkers subsidize people who are buying new cars. Like all government subsidies, including government aid to the poor, C4C is horrendously inefficient. Various observers have pointed out that a great deal of that first billion dollars in funding disappeared into thin air. On top of the taxpayer loot being stolen and squandered, we must add the value of the cars being destroyed. The final cost of this initiative will be far more than the billions of taxpayer dollars Congress has voted to pump into it. Of course, that funding is more of Obama’s reckless deficit spending, so the final total must be marked up to include the titanic interest paid to service the debt.

Cash for clunkers is hurting charities that have car donation programs. Sure, they are still getting donations of cars that don't qualify for a voucher because they don't run. It's the sale of donated cars that DO run that brings in the bulk of the revenue. These cars are now being turned in for a voucher and subsequently crushed. What a tremendous waste!

Ronald Reagan's quote regarding left-wing tax policy is equally apt to describe their handling of the auto industry, with Cash for Clunkers being the piece de resistance (or maybe the coup de grace). :

"If it moves, tax it.
If it keeps moving, regulate it.
If it stops moving, subsidize it."

Actually, Ronnie Raygun stole those lines from Alfred E Newmann. Ronnie read scripts, not books. As the late, great actress, Helen Hayes once said of Raygun's rise in the charts: " We never thought Ronnie would go so far. " Obviously, she didn't know the masterful puppet-masters of the Republican Party !! You know, the Party that sold guns for hostages to Iran. Yes, Matilda, that same Iran !!
SUPPORT OUR TROOPS, BRING THEM HOME, ALIVE AND WHOLE. NOW.