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Cash for Clunkers Statistics: Who Benefited?
Posted By Ron On August 29, 2009 @ 9:45 AM In Business,Debt,Government,Taxes | Comments Disabled
Predictably, the US Department of Transportation  has nothing but praise for the program, but where did the $1 billion oops, $2 billion oops, almost THREE BILLION dollars of our own money get spent ($2.877 billion)?
Top 10 New Vehicles Purchased
Top 10 Trade-in Vehicles
Average rebate: $4,170, though very few have been paid.
What’s funny/odd/interesting is the praise the Federal government has for foreign car manufacturers with plants based in the US.
“Cars made in America topped the most-purchased list, from the Ford Focus to the Toyota Corolla to the Honda Civic.”
Since when did Honda and Toyota become “American Made?” I agree that they are technically “American Made” since they’re assembled in the US, but the profits from those vehicles go overseas. Maybe the Federal government should take over the foreign car companies …
Here’s the rub, despite the praise, will the purchase of these new vehicles actually spur our economy ? I don’t think so, at least not for the long term. Why?
The spending flurry this Congress is initiating is lowering the value of US dollars. As a result, oil prices are rising despite increasing supplies . Could this potentially cancel out the predicted fuel savings from the increased fuel efficiency of the new cars Americans bought through the program? Maybe. The Transportation Department claims that the US will enjoy an increase in fuel economy  but fails to mention how much. If it was substantial, you can bet it would have been mentioned.
Beyond the claim of “saving 42,000 jobs” (which is dubious at best), I’m curious if anyone is concerned that we’ve baited the American consumer into going into more consumer debt on an item that loses value the day you drive it off the lot. Does anyone really believe that the 404,046 cars and 280,895 trucks that were purchases were NOT financed? In an era when it appears that our society is actually beginning to learn the dangers of consumer debt, the Federal government swoops in to tempt us to buy more depreciating “assets.”
In addition, though the Cash for Clunkers program isn’t Federally taxable , some states may view the benefit as something taxable. Given the budget  squeeze many states are experiencing, I wouldn’t be surprised if states tax the benefit. In case a politician reads this, increasing taxes has a negative economic impact.
In the short term, there will be praise, increased output to replace inventories, claims that we’re less dependent on foreign oil, claims that the environment is better off, and a disregard for how much it costs and how much the economy  will decline six months after the program is over.
Maybe I’m too skeptical, but have YOU ever heard the government criticize a program?
Here are some other posts on the Cash for Clunkers program:
Article printed from The Wisdom Journal: http://www.thewisdomjournal.com/Blog
URL to article: http://www.thewisdomjournal.com/Blog/cash-for-clunkers-statistics-who-benefited/
URLs in this post:
 Tweet: https://twitter.com/share
 US Department of Transportation: http://www.dot.gov/
 economy: http://www.thewisdomjournal.com/Blog/?p=477
 oil prices are rising despite increasing supplies: http://www.breitbart.com/article.php?id=D9ABTNOG2&show_article=1
 Federally taxable: http://www.mydollarplan.com/is-there-a-cash-for-clunkers-tax/
 budget: http://www.thewisdomjournal.com/Blog/go/budget.php/
 Cash for Clunkers Taxable?: http://frugaldad.com/2009/08/28/cash-for-clunkers-taxable/
 Cash for Clunkers Tax: http://ptmoney.com/2009/08/28/cash-for-clunkers-tax-rules/
 Cash for Clunkers Tax Rules: http://www.goodfinancialcents.com/cash-for-clunkers-tax-free-credit-rules/
 Questions About The Cash for Clunkers Program Answered: http://www.biblemoneymatters.com/common-questions-about-the-cash-for-clunkers-program-answered-gas-guzzler-rebate-faq/
 Get Money for Your Gas Guzzler: http://www.moolanomy.com/1680/cash-for-clunkers-get-money-for-your-gas-guzzler/
 Cash for Clunkers: Is It Even Worth It?: http://amateurassetallocator.com/2009/07/17/clunkers-for-cash-is-it-even-worth-it/
 Cash for Clunkers: Broke Already: http://freefrombroke.com/2009/07/cash-clunkers-broke.html
 Cash For Clunkers Ending Monday – Toyota and Honda profit much more than Ford and GM: http://www.debtfreeadventure.com/2009/08/cash-for-clunkers-ending-monday-toyota-and-honda-profit-much-more-than-ford-and-gm/
 cash for clunkers: http://technorati.com/tags/cash+for+clunkers
 federal spending: http://technorati.com/tags/federal+spending
 cars: http://technorati.com/tags/cars
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