Thursday, August 20, 2009

"Cash for Clunkers" Clunks to a Halt

Yes, that nonsensical program called "cash for clunkers" which destroyed hundreds of thousands of perfectly good cars, saddled people who can't afford new cars with car payments and larger insurance payments that they can't afford smack dab in the middle of the worst recession since the last Democrat-induced recession 30 years ago and left car dealers on the hook for millions of dollars in $4500 rebates that the bureaucracy will eventually grind out of the hides of taxpayers to the tune of $3 billion is finally over! Whew!

After seven months of this "don't believe what you see with your own eyes" style of audacious political BS, it's not surprising that the Administration of the Most Exalted Messiah and the lapdog liberal media would be hailing this flop designed by a political appointee barely out of his law school internship as a smashing success when it was in fact an economic disaster that we will be paying for for years to come. How so? Let me count the ways.

First of all, the big-brain bureaucrats in charge of this debacle vastly underestimated the cost of this program by a magnitude of three. We'll be lucky if they do so well as to underestimate the cost of their health care boondoggle by 200% as they did with "cash for clunkers".

Not only did they underestimate the cost of the program by 200%, they underestimated what it would take to administer the program. You'll recall the whole thing completely fell apart within a week. Even after infusing it with 200% more cash, they still haven't been able to get the cash to the dealers who are on the hook for hundreds of millions in rebate vouchers that have yet to be paid. And they say our concerns about a bureaucracy that can't administer a simple cash rebate program being able to run a health care system for 300 million people are "evil mongering". They should have just turned this rebate program over to Best Buy. At least they know how to manage a simple rebate program. And I have no doubt that Best Buy could probably do a better job running a health care system that the federal government can as well.

The next thing this idiotic circle-jerk did was take hundreds of thousands of perfectly serviceable old cars off the road. As a driver of one of these perfectly serviceable old cars -- a 13-year-old Mercury Villager with 177,000 miles on it -- I can tell you that maintaining an older car in good shape is a hell of a lot less expensive than buying a brand new one, regardless of whether you get a $4,500 rebate or not. Many of these perfectly good cars aren't second cars as mine is. They are (or were) the primary mode of transportation for many lower income families, young adults and teens -- people who would be far better off maintaining their old car and driving it than taking on a car payment and a larger insurance payment. But many of them ditched their decent older car and traded up to the car they couldn't afford. As with any commodity, when you reduce the supply the price goes up. Because many of these dealers destroyed the whole car, it will be more expensive to fix the older cars that are left -- particularly the engine and transmission which the dealer has to destroy. No spare engines and transmissions, no spare engine and transmission parts. Duh!

Third, as I previously pointed out, if it took the artificial inflation of the trade-in price of your vehicle to get you out to buy a new car, you couldn't afford the new car in the first place, let alone the increased cost of the insurance on a new car. Watch for a mini boom in car repossessions in a couple of years and an epidemic of people with lapsed car insurance in the next few months. Kind of a Fannie Mae and Freddie Mac of the auto business brought about by a "community reinvestment act" for the auto industry.

Finally, with the end of this ridiculous waste of taxpayer dollars comes the end of the mini boom in car sales. And dealers are still waiting to get their rebates. Isn't liberalism wonderful?

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