A clunker of an idea

Is there anything good about the Cash for Clunkers program? After an exorbitant bailout of the car industry financed by taxpayers (though I guess you could argue that no one paid as the money was just printed, but we'll pay later), taxpayers must now pony up to $4500 each (or a total of "billions and billions," as the late Carl Sagan would say) to subsidize people who were going to buy a new car anyway purchase a car that gets at least 4 mpg better mileage that really won't reduce the carbon footprint.

In a typical month, according to Edmunds, 60,000-70,000 clunker-type car deals occur, so that the deals occurring under this program now are roughly at or slightly above what would have happened anyway, perhaps just slightly accelerating the natural trade-in rate (and decelerating future purchases?). And if you are a responsible citizen who cares about the environment, sorry, the free money is only for the environmentally irresponsible driving the low mpg cars. Are the clunker-traders likely to "trade down" to a smaller, far more fuel-efficient car? Probably not, as the data show (can't remember where I read it, though) that people who drive bigger, less fuel-efficient cars (the clunkers) are likely to buy cars that are still pretty big, i.e., closer to the 4 mpg gain types. Also, a new car tends to be driven around twice as much as the traded-in car, resulting in a short-term net increase in emissions. Add the carbon needed to manufacturer and deliver the new vehicle, and the carbon break-even is typically several years, perhaps resulting in a long-term net loss environmentally.

So now the old cars are being destroyed, many dealers are having problems getting reimbursed for many of the same reasons that we don't get the rebates we expect as consumers, the environmentally unfriendly are being rewarded, the auto-industry is getting another enormous stimulus from the taxpayers without their approval, and there is tremendous cost for a program that really won't help the environment or the tax payers (or the used car dealers, probably).

Can't wait to see what happens with health care.