Tuesday, August 04, 2009

"Cash for Clunkers": Lunatic Economics

Another day, another Obama administration cover-up. This time, they don't want to talk about where the first $1 billion in their much-ballyhooed "cash for clunkers" program went. This, as they ask for $2 billion more:

The Obama administration is refusing to release government records on its "cash-for-clunkers" rebate program that would substantiate — or undercut — White House claims of the program's success, even as the president presses the Senate for a quick vote for $2 billion to boost car sales.

Transportation Secretary Ray LaHood said Sunday the government would release electronic records about the program, and President Barack Obama has pledged greater transparency for his administration. But the Transportation Department, which has collected details about 157,000 rebate requests, won't release sales data that dealers provided showing how much U.S. car manufacturers are benefiting from the $1 billion initially pumped into the program.

What are Lahood and Obama trying to hide? Maybe this little chart, that gives an idea of what vehicles were purchased under the program, in volume ordered . Good news: Lots of fuel-sippers. Bad news? Well, where do we begin?

1 - Ford Focus
2 -Toyota Corolla
3 - Honda Civic
4 -Toyota Prius
5 -Toyota Camry
6 - Ford Escape
7 - Hyundai Elantra
8 -Dodge Caliber
9 - Honda Fit
10 - Chevy Cobalt

For openers, six of the top ten are foreign cars. So much for government ownership of the auto companies. Even when they create another taxpayer-funded program to help American automotive move some product, they still wind up helping foreign car makers more. Maybe because - in many cases - they're the better vehicle?

Additionally, no one is looking at the toll this program takes on poorer and younger drivers. "Clunkers", whose main liability is fuel consumption as opposed to inability to operate, are being taken off the road, depriving the poor of lower-cost used vehicles, and making older vehicles harder and more expensive to maintain as parts literally disappear off the marketplace (these "clunkers" are being liquidated, literally). Does every new immigrant and post-college student have the credit to buy a new $20,000- (at least) car? Do they have the financial wherewithall to even make the payments ? How will they get around, unless the government now spends even more money on "public" transportation, assuming these folks have access to it?

Ah, spending. We printed up the first $1 billion for this program, now Baracky wants $2 billion more. Where will it come from? Is it to be printed up as well and simply added to the deficit, a deficit so large that no one wants to buy our IOU's anymore? And if that's what he wants - more taxpayer welfare for Government Motors - shouldn't we demand that the government open the books and be held accountable?

This is madness..."lunatic economics", indeed.

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