Thursday, August 20, 2009

Cash for Clunkers: spreading debt and chaos the socialist way

Cash for Clunkers Ends Monday

The Cash for Clunkers program... let us count its many wonderful benefits:

  • All taxpayers are compelled to shoulder the cost of subsidizing the purchase of new cars for a few taxpayers. That's called, "spreading the wealth", and our president likes to do that.
  • The "clunkers" are cars that were being used; they were working. They had some value. But now they will be destroyed, discarded not because they are worthless, but because the law requires it. Destroying private property and replacing it with federally funded property: our president likes that too.
  • Car dealers benefit from this program -at least if they actually ever receive the promised rebates. Yet, other businesses and industries do not enjoy these benefits. Mr. President, how is it fair to use tax money to selectively benefit only certain sectors of the market?
  • We are supposed to believe that the program benefits the environment and will save energy. Yet will energy actually be saved? How much energy was used to manufacture the new cars that will be sold to people who otherwise were not prepared to purchase a new car? How much energy is wasted in the premature destruction of the functioning "clunkers".
  • Many citizens using this program perhaps would not have purchased a car at this time had the program not been in place. Why? Because for many, buying a new car is a big expense, and they had not judged it wise to make such a purchase at the time. Does a $3500 or $4500 reduction in the upfront cost of the car mean that it's no longer expensive to buy that new car? Of course not. So, many buyers will have been wooed by the program to make an expensive purchase at a time when things financially are pretty tough for many people.

Like many government programs, Cash for Clunkers does benefit a few... but at a high cost born by the many. The program produces not a net benefit, but a net loss. The total costs to individuals and businesses outweighs the total benefits.

And this is the curse of most every government program which meddles with the economy in order to "improve" it.

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