First Principles

In search of the Unified Theory of Conservatism

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What We’ve Learned from Cash for Clunkers

August 5th, 2009 · 5 Comments

Obama has declared the program a “success.” But what does that mean?  Consider:

  1. Congress authorized $1 Billion for the program, and expected it to last until November.  It didn’t make it past the first week of August.  This is an important thing to consider when considering the President’s own spending and deficit projections.
  2. That first Billion was supposed to be a one-time “shot in the arm” for the economy.  Now there is panic over the “need” to expand it for another $2 Billion.  Government programs, no matter what sunsets and deadlines and whatnot are attached to them, are harder to kill than a lawn full of dandelions.
  3. The program is also supposed to have tremendous environmental benefits. The average new car purchased with the rebates gets 25.4 mpg, while the average trade in got 15.8 mpg.  The EPA estimates that the average passenger car drives 12,000 miles per year.  Despite the fact that the White House refuses to release details about the program, high estimates I’ve seen put the number of cars bought under the program at 250,000.  That all translates to a savings of 196,609 gallons of gas per day in this country, which sounds great until you do some more math, and realize that this represents less than 0.0024% of all the gasoline burned on the globe every day.  And of course, this further assumes that none of the people who took advantage of Cash for Clunkers would have bought a new car this year anyway.
  4. Put another way, all that gas saved represents about 652,386 metric tonnes of carbon not put into the air each year – 0.000027% of the CO2 emitted by human activity.  It’s hard to imagine a less significant number.
  5. But even if you’re in the “every little bit helps” camp, consider:  The cost of buying enough carbon offsets to cancel that out is about $6.5 Million – 0.0065% of the cost of Cash for Clunkers before any additional money is spent.
  6. If the government offers to hand out tons of free other people’s money, people will line up to take it.  Duh.
  7. Of course, while Point 6 above is obvious to anyone with a brain, liberals will always be baffled by the fact that people will line up to take free other people’s money at a rate that is orders of magnitude any liberal actually expects.  (I’m being charitable, and assuming good intentions.)  In spite of this, those same liberals want us to trust them on their cost estimates for Nationalized Healthcare, Cap-and-Trade, and a whole host of other Big Government programs.
  8. One of the problems we have with our economy is too much consumer debt.  In spite of this, the government just incentivized people to trade in older cars that a) are probably fully paid for and b) would otherwise have been driven for several more years for NEW cars, 99% of which will be bought on credit.  In other words, President Obama has just added to the economic instability in this country in the name of stabilizing the economy.
  9. Related to that, I wonder how many of these Cash for Clunkers cars are going to be repossessed in the next year?
  10. The theory behind Cash for Clunkers as economic stimulus is that it “gives” people more spending power.  Ironically, this validates the theory underlying the across-the-board tax cuts George Bush championed – you know, the same ones liberals hate so much.  The difference, of course, is that tax cuts let people increase their spending power across all sectors of the economy (far more fair to all American businesses), and eliminates the cost of the bureaucracy required to take your money, process it, and then give it back to you.  Well, that, and tax cuts actually stimulate economies, unlike these one-time gimmicks.
  11. The President of the United States is dealing with sales and earning reports for car dealerships.  Seriously.  Have a little frickin’ dignity, Mr. President.  You’re the Leader of the Free World, and have more important things to focus on.  The only thing missing is the inflatable gorilla floating over the Rose Garden.
  12. I’ve learned that giving BIG BIG DISCOUNTS!!! on new cars is one of the powers specifically delegated to the Federal Government in the Constitution.  After all – if it wasn’t, they wouldn’t be able to do it, right?  I’m very upset this was never once mentioned in 4 years of Political Science classes and 3 more years of law school, and I think I owe some professors a stern letter…
  13. When the media says something is “popular,” an adjective used in virtually every headline I’ve seen about the program, what they mean is that a majority of Americans oppose it.

To Obama, apparently, “success” doesn’t mean the economy was stimulated, because it wasn’t.  It doesn’t mean that a single job was created or saved.  It doesn’t mean that there is any meaningful environmental impact.  It doesn’t mean that any money was saved.  It doesn’t even mean that most Americans like it.  It doesn’t mean that a government cost/benefit analysis was shown to have a dime’s worth of validity.  It does nothing to increase faith that these people are competent to centrally manage our economy, or any part of it.

The only thing it can be said to have done “successfully” is this.  It took hard earned money from millions of hard working Americans, and redistributed that wealth to thousands of other Americans who did not earn it, for the designated purpose of buying something they didn’t strictly need in the first place.

This is a perfect micro-example of some of the White House’s bigger and more substantial plans, and the implications are terrifying.  A few more “successes” like Cash for Clunkers, and we’re in some real trouble.

Tags: Big Government · Constitutional Law · Economy · Environment · Health Care · Liberals · Obama · Socialism