Mustang Parts
   Carrying Saleen wheels and Bullitt wheels.

Monday, August 03, 2009

Why CARS (Cash For Clunkers) Should Be Extended

I posted previously that I didn't think the CARS program would be extended, and the outcome is still currently doubtful.

I think that CARS should be extended.  Many billions of dollars have been set aside for banks and insurance companies (some of which are now paying out huge bonuses to their employees).  Billions more have been set aside for "green energy" investments.  All for the sake of "stimulus".  However, much of the stimulus money won't be spent any time soon.

By redirecting some of the stimulus money to the CARS program, Congress would accomplish more stimulus sooner.  Money would flow quickly to dealerships, with their employees and dependent businesses, and money would flow to the automakers and suppliers.  It would also have the beneficial side effect of reducing gasoline demand by improving the overall fuel economy of the cars on the road. 


Anonymous said...

Unfortunately, when the money goes, the sales go. From Edmunds CEO:

I love a good sales surge as much as anyone. But it’s not that simple. First, it’s not clear that cash for clunkers actually increased sales. noted recently that over 100,000 buyers put their purchases on hold waiting for the program to launch. Once consumers could start cashing in on July 24, showrooms were flooded and government servers were overwhelmed as the backlog of buyers finalized their purchases.

Secondly, on July 27, published an analysis showing that in any given month 60,000 to 70,000 “clunker-like” deals happen with no government program in place. The 200,000-plus deals the government was originally prepared to fund through the program’s Nov. 1 end date were about the “natural” clunker trade-in rate.

Clearly, cash for clunkers was underfunded from the start. Consumers quickly figured that out and rushed to take advantage before funding ran out.

This sales frenzy was inevitable. We have crammed three to four months of normal activity into just a few days.

Anonymous said...

Speaking of oil use reductions:

Anonymous said...

It isn't fair to every other product segment. Car welfare seems nice, but why just cars? I do understand this part of some sort 'green' program (that allows a Hummer to be bought! LOL), but give me a tax break and why not the companies around the US laying people off? The logic is based on a socialistic midset that allows the government to pick and choose the winners and losers. That is a loss of liberty.

Anonymous said...

Kudlow likes it.