"Cash for Clunkers" sounds like a wonderful idea, right? In some aspects, yes and in some aspects, no.
Cash for Clunkers is a government program that will allow $3,500 to $4,500 allowance when a consumer trades in his clunker for a newer, more fuel efficient automobile. The program was set to begin July 1, 2009 but didn't start until July 24, 2009. $1 billion was allocated for this program which quickly ran out as over 22,000 new cars were purchased within the first week of the program. Cash for Clunkers is already broke but Congress is said to be allocating another $2 billion for the program, due to end in November, this year.
In some aspects this program has been stimulative as its raised sales for car companies like Ford. And that isn't a bad thing. With that being said, there are some major issues with this program that aren't being advertised by the main stream media.
1. As previously discussed, the program went broke with in one week as the estimated allocations were not enough. The government must put more money into the program, which means more tax payer dollars.
2. We won't know for sure for a while who the people are that are actually purchasing these more fuel efficient cars but the assumption is that they're either people who were going to buy a car in the next year anyway or they're people who won't be able to afford their payments later on down the road (remember the housing bust?).
3. The cars that are eligible for the program that are considered "clunkers" CAN NOT be older than 25 years. So, those who have a clunker from before 1984 are NOT eligible for the program.
4. Consumers must purchase a new vehicle, not a "new-used" vehicle.
5. The cars that are traded in are shredded or crushed and then will be put into a landfill (very green).
6. The government run program in which dealers register in order to be able to participate has already been backlogged and is behind on paperwork in getting vouchers to the dealers. However, if the dealer doesn't provide the necessary paperwork for the program it will be fined.
7. The website that dealers must use to participate in the program, states in its terms of use agreement, that once you click "I agree", the government now owns your computer and any authorized officials can have access to it.
8. There is only a limited amount of funds that are to be used for certain categories of trucks and once that runs out, people won't be able to purchase that type of truck.
9. The difference in mileage required from clunker to new auto ranges from 2-10 mpg (2 for certain types of trucks and 10 for certain types of cars).
10. Cars turned traded in can not be used for spare parts which could significantly affect used parts dealers.
11. Those who tell you that Cash for Clunkers has been the best part of the stimulus program are lying. This program was not even in the American Reinvestment and Recovery Act. Originally, it was to be included in a defense spending bill, but later became a bill of it's own. It was never a part of the original stimulus; this money is NOT part of the $787 billion stimulus package.
12. No where in the rules does it stipulate that the new cars purchased must be American.
So, with all that being said, the actual "stimulus" portion of this program is not necessarily a bad thing but it is not sustainable and there is the possibility that there are people participating in the program who should not be purchasing cars as they can't afford them. This program could ultimately hurt Americans who are in the used parts business, thus costing jobs. The program is already technically a failure as it's run out of money and the system has already been overloaded and doesn't work.
The point of all this? These people who instituted this program that will have ramifications beyond just tax payer dollars going towards other people purchasing cars are THE SAME PEOPLE WHO WANT TO OVERHAUL THE ENTIRE HEALTHCARE SYSTEM!!!!
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