“The federal government went bankrupt in one week in the used-car business, and now they want to run our health care system,” Mr. DeMint said in an interview on “Fox News Sunday.” “This is crazy to try to rush this thing through again while they’re trying to rush through health care, and they want to get on to cap-and-trade electricity tax. We’ve got to slow this thing down.”The thing that bugs me the most about this program is the wanton wastefulness of it. Perfectly good used cars are being destroyed and for what? In the worship of the great God Gaia used cars that could be put to good use are being wasted. Just take a look at the Volvo in this video - that would have been a great car for somebody that couldn't afford a new one.
This program could have been much more effective, and one that I might have supported, had they done one more thing: Instead of destroying perfectly good cars, require that the trade-ins be donated to local charities. Those charities could have either used the vehicles for their own work, or sold them to raise funds. Think how much money could have been generated for charitable work had they done that. Something like 250,000 cars have been traded in and now destroyed...a complete waste.
This will also distort the used car market making less expensive used cars harder to find and thus hurting those who need those cars.
The other issue that will come back to haunt the auto industry in a year or two will be the lack of demand. People are buying cars today because of the program who might not have bought one until the recession eased or their needs changed in a year or two. That future demand is being used up today. Look for a big dip in auto sales in a year or two.
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3 comments:
The government really doesn't want charitable work. It's against their principles. And, I wonder how many of the new purchasers of these cars will default on their new loans??
Maybe they will want BO to help them out with their loans, that most of them probably couldn't afford in the first place.
Same song, second verse, goes round and round, and only gets worse.
they don't want to donate the cars because they want them off of the road. That was the purpose of Cash for Clunkers. It was meant to save the planet. It stimulated the economy only by mistake.
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