‘Cash For Clunkers’ Program Gets Extra $2B
The Cars Allowance Rebate System (CARS), better known as the ‘Cash for Clunkers’ program, has been so successful that the program which began July 1st is already out of money. Lots of people took advantage of the program, running through the funds that the White House previously thought would last until around November. A $2 billion extension has been approved by both the House and Senate, and it is now expected to last until Labor Day. The program had it’s share of haters, though.
Now, I’m no economist. I don’t pretend to be. But I read up on the Cash for Clunkers problem and I personally don’t see the negatives. The program allows car owners who own vehicles that aren’t fuel efficient and are old, hence the term clunker, to be traded in for cold cash that must be used to purchase or lease a new, more fuel efficient vehicle. It’s beneficial to the environment, somewhat lessons the demand for oil, and stimulates the economy. The stimulation clearly comes from people having the extra money to purchase vehicles. Matter of fact, this past July, even Ford reported it’s first year-over-year increase in two years. Ford!:
The Ford Motor Company announced on Monday that its July sales were up significantly. In fact, Ford posted its first monthly year-over-year increase in two years.
George Pipas, a Ford sales analyst, said the increase was the first for the company since November 2007 and apparently the first for any of the six biggest automakers since last August. The total exceeded the 161,071 recorded in July 2008, Mr. Pipas said. He added that the July sales had also made it the ninth month in the last 10 that Ford had posted a gain in market share.
So, it seems like everyone is benefiting. Consumers, auto-industry, and environment; everybody’s eatin’. Sounds like a good look to me. Thank goodness we have politicians like Republican Senator Richard Shelby to protect us from the evils of successful government programs:
Senate opponents of the program, most of them Republicans, question its effectiveness and cost. They contend the funding is leading the government to pick winners and losers and that many car buyers, stoked by speculation about the program last spring, simply held off buying until the incentives started in July.
“These buyers would have bought the cars anyway,” said Sen. Richard Shelby, R-Ala., who opposed the plan.
… Ok, let me see if I get this; Sen. Shelby and others that oppose the program are saying that the reason why this program is so successful is because people heard about the program and decided to utilize it when it became available to the public? Yeah, and? If a person needs a ride, is struggling to make ends meet, and catches wind of a incentive-based program that is purposed with making it easier to purchase a vehicle, isn’t that the point?
It seems that literally no program is worth it to some people, even the ones that work.
For more information on the program, go here.
UPDATE: Earlier, I said that in return for their old vehicles, participants of the program get cold cash. That’s inaccurate. They are actually given a rebate at purchase.