Government Spending

Cash for Clunkers Was a Bad Idea (Part #437)

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A new study finds that paying people to destroy functioning cars and replace them with new, marginally cleaner cars was a bad idea. Again:

A newly updated analysis from economists at Resources for the Future finds that the actual benefits of the program were pretty meager. The paper examined U.S. car sales using trends in Canada as a control group, and estimated that about 45 percent of cash-for-clunker vouchers went to consumers who would have bought new cars anyway. In the end, the program boosted U.S. vehicle sales by just 360,000 in July and August of 2009 and provided no stimulus thereafter. What's more, the program increased average fuel economy in the United States by just 0.65 miles per gallon.

Now, there's a case to be made that that's better than nothing. For one, handing $3,500 vouchers to people who would've bought cars anyway still counts as stimulus. What's more, as the RFF paper found, the program reduced overall U.S. carbon-dioxide emissions by between 9 million and 28.4 million tons. But even so, that implies that it cost between $91 and $288 per ton to get those reductions — a pretty lousy bargain as far as carbon policy goes. Even if the program did have some benefits, it's hard to argue that it was an efficient way to dole out cash.

For what it's worth, figures for the appropriate cost of carbon dioxide tend to hover between $20 and $40.

Reason was all over the Cash for Clunkers fiasco.

Take it away, Uncle Sugar:

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39 responses to “Cash for Clunkers Was a Bad Idea (Part #437)

  1. Can you repost this article in the form of a Friday Funnies?

  2. figures for the appropriate cost of carbon dioxide

    Are completely fictional.

    1. ^^This^^

      And RC in case you missed it on the other thread, if you rancher owners of your hospital are telling you they run a ranch or a farm without going into debt, they are having some fun lying to their Harvard lawyer. I have spent my entire life around farms and ranches. And every farmer or rancher is in debt. You can’t operate without doing it. Now, the old school ones manage their debt and actually pay it off and they may like my grandfather have more cash on hand and equity in things than debt. But they all borrow money to buy land, cattle and equipment. Stuff is just too expensive not to do it that way.

      1. These guys have oil under their ranches, John. Most of which have been in their families for generations and I have no doubt are unencumbered at this point.

        I’m sure they have some credit lines for ranch operations. Who doesn’t?

        Buy they have a serious allergy to debt, and our hospital owes not one thin dime to anyone.

        1. If they have oil wells then they use their oil money to support their ranching habit. I know exactly the kind of guy you are talking about. Sadly they are fewer and fewer. But don’t let them pull your leg. They borrow money

  3. it cost between $91 and $288 per ton to get those reductions

    Why don’t they just say, “Who the fuck knows? But it seemed like a good idea at the time.”

    1. Why don’t they just say, “Who the fuck knows? But it seemed like a good idea at the time.”

      Present!

  4. We don’t get it. KMW posts an almost-hour-long video this morning, and the peanut gallery shuns it. Then she posts a two-minute video, and the volk are all over it!

    1. MTV generation conditioning.

      1. The MTV generation is in their 40s. Get a new term for the ADD afflicted.

    2. We have time for snark and two minute videos. To watch an hour-long video? not so much.

  5. What’s more, as the RFF paper found, the program reduced overall U.S. carbon-dioxide emissions by between 9 million and 28.4 million tons.

    TREE KILLERS!

  6. For one, handing $3,500 vouchers to people who would’ve bought cars anyway still counts as stimulus.

    If, by “stimulus”, you mean advancing the date of purchase by a few months.

    1. I think they mean government giving people money to spend on stuff, because to them everything we have comes from government.

    2. I have a thought. The government could advance me $10 billion, which I have to repay (principal only) in one year.

    3. Yeah, and nice of them to reduce the supply of inexpensive used cars for low-income people. Wonder what that would do to the price of a used car…

  7. Uncle Sugar may not, I repeat, may not clunk my junk.

  8. I once murdered the planet, but it was in self defense.

  9. You can’t make this shit up.

    Touched: The Jerry Sandusky Story

    1. That is fabulous, Sidd. Sick and twisted, but fabulous nonetheless.

      1. I’m only surprised at how few Amazon “reviews” there are so far.

        1. Well he touched me alright. Over and over and over…

        2. That was hysterical. Even more so the people commenting on the joke reviews that they “might be a spoof” or “this isn’t funny, think of the children!”

    2. I hovered over the picture under “Look inside!” and a box came up that said, “Back Cover, Surprise Me!”

      1. And the winning Amazon comment/review:

        Look – it also comes in a “Leather Bound” edition

  10. “For one, handing $3,500 vouchers to people who would’ve bought cars anyway still counts as stimulus.”

    Lol, what?

    1. It does expose the general idiocy of stimulus. Let’s give people money we don’t have! That’ll make things better!

    2. Boosting the phantome saved/created category…

  11. The government could advance me $10 billion, which I have to repay (principal only) in one year.

    Something something space elevator something something something….

    PROFITZ!

    1. Actually, I was just going to invest in something safe and pocket the interest.

      If we’re talking grants, space elevator for sure. But I’ll need $100 billion for that.

      1. At 1%, you’d go home $100MM richer.

        And it would be a better deal for the taxpayer than Solyndra.

        1. I think I could swing 1%, even in this economy.

      2. Fuck that. Buy your own island , stock it with SAMs, and then tell them to piss off when they ask for it back.

        1. That’s my backup plan in case my investment doesn’t yield a positive return.

        2. I think that would entitle you to foreign aid, wouldn’t it?

          1. Good point. I better oppress my people and keep them poor to ensure continued aid.

      3. Just start your own bank. That way you could cash in on the Fed’s negative interest rates.

  12. For one, handing $3,500 vouchers to people who would’ve bought cars anyway still counts as stimulus.

    Why not just eliminate the car purchasing part and simply hand out freshly printed money?

    I mean, radonly printing money and handing it out to people has worked on countless prior occasions, hasn’t it?

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