The House approved a bill Friday afternoon to provide $2 billion to continue the federal government's week-old "cash for clunkers" program, which has proven so popular with consumers that it was almost out of cash. The 316-109 vote split Republicans but attracted the support of nearly every Democrat in the chamber.
The money will come from funds in the already-passed economic stimulus package that were intended for energy loan guarantees. Congress will seek to replenish the energy program at a later date.
Thus a program that sees economic progress in taking actual working objects that meet human needs (even if at less than 18mpg) and destroying them in exchange for some inked paper will stagger on. While thusly staggering, it also sets in essence a $4,500 price floor in what would probably have been the cheapest used cars on the market, thus pricing the less well off out of the car market entirely.
There are so many more totally useful things the Feds could buy and destroy in order to create the "stimulus" of forcing people to use resources they (or the government, which of course gets the opportunity thanks to the unbacked dollar to pretend that it has no tradeoffs; note that Congress intends to "replenish" the energy program it dinged for this cash later) could have used for other things to replace them. We could enjoy "bucks for bungalows" to re-inflate housing; "shekels for stereos" to get the electronics business zapping; "moolah for motorboats" to get our seas swelling with the sweet sound of economic growth. Well, I'm sure they are more experienced in Washington at coming up with these sort of ideas than I am.
Some interesting details of the program, for SUV owners wanting to trade up:
If you're trading in a basic truck, van or SUV—in other words, not a heavy-duty truck or big passenger van—you can get a $4,500 credit for purchasing a new truck or van with fuel economy that's better by 5 mpg or more. You can get a $3,500 credit for a 2 to 4 mpg improvement….
If you're trading in a bigger truck—a truck with a wheelbase of 115 inches or a van with a wheelbase of 124 inches—you're eligible for a $4,500 credit for buying a similar vehicle with a 2 mpg improvement or a $3,500 credit for buying one with a 1 mpg improvement.