Cash for Clunker-policies

[Lord Bitememan]

So everyone's abuzz about how wonderful and great the Cash for Clunkers program is. That is, everyone except for James Pethokoukis of Reuters, who may well be the last journalist who ever studied economics. The problem with Cash for Clunkers is that all it is doing is getting people who would have entered the auto sales market within a month to a year anyways, and getting them to jump in now. People who don't buy new cars usually don't do so for economic reasons, usually because they can't afford the monthly payments. Knocking off some chunk of the amount of time they will have to make the payments does not make the payments anymore affordable. So, all this incentive program really does is get people who buy new cars to expedite the process of buying a new car. That means in a month to a year these buyers will not be in the auto sales market, and sales will slump as a result. What's worse, we're paying money now to create a slump later on. I'm confident the public will never realize the failure this program will become, partially because of euphoria over the program now, partially because we're really bad about sorting out retrospective economic data. But, I'm confident, give it 3 to six months after November and you will see auto sales slump.  

[Pumona]

Yeah, auto companies have already had problems getting money from the government. They are losing to much money with this whole plan and it will cause more auto companies to go under.  

[Crusyx]

The thing that really irks me is that , as I have been informed, most of the cars being sold are not Ford, Chevy, Chrysler and other American companies. If people are buying foreign cars with this deal then it just means we're sending the money out of the country and out of our economy. Therefor we're not helping the companies that C4C should have helped. I feel like the program should have only applied to American car companies, though I also think it shouldn't have even been started at all, a little dose of protectionism can actually be a good thing if you know what to promote and what to open up to foreign trade. Well, that's my humble opinion.  

[Pumona]

Crusyx

The thing that really irks me is that , as I have been informed, most of the cars being sold are not Ford, Chevy, Chrysler and other American companies. If people are buying foreign cars with this deal then it just means we're sending the money out of the country and out of our economy. Therefor we're not helping the companies that C4C should have helped. I feel like the program should have only applied to American car companies, though I also think it shouldn't have even been started at all, a little dose of protectionism can actually be a good thing if you know what to promote and what to open up to foreign trade. Well, that's my humble opinion.

Actually if you read the bill, you can trade in any car/truck that gets 18 mpg or less and have a choice of two rebates. 3500 if the new one is 4 mpg+ and 4500 if the new one is 10 mpg+. You can get any make you want. Know I do not like this program but, I will keep buying Foreign cars/trucks. They are built in America by Americans and last longer then most ( not all ) American cars.

http://automobiles.honda.com/CashForClunkers/?
ef_id=1097:3:s_0c7d1a94f6d5a5370e1bb445f0d4bfdf_3788418222:SnlINUNIYWQAAA4upi8AAABA:20090805085205  

[Rainbowfied Mouse]

I read on Wii News that the Cash for Clunkers policies in France and Germany have helped their economies (one of the few countries who's GPA's went up this quarter)  

[Lord Bitememan]

Did the article stipulate GDP growth over a long term, or over a near term? i.e. had the policies recently concluded, or were they at the start of a growth spurt starting several months back?  

[Rainbowfied Mouse]

They said it was just a starting to grow. Some French economists stated that this is the start of the turnover of their recession... I'll have to check again to make sure my statements are accurate!  

[Lord Bitememan]

Several things to consider:

1. It's very important to check who those economists work for. That can have as much to do with their opinion as anything.

2. A burst in sales will always make the books look good for a quarter. The issue is, does it sustain past a quarter? Or do the natural market forces I described eventually take over?

3. Europe was arguably in a better state than the US to begin with, since the bank failure occurred here, not there.  

[Rainbowfied Mouse]

Screw wii news, they took that tabloid down, now I'll never know =.=
Unless it was a dream mad  

[Latopazora]

I seriously thought about taking advantage of the C4C program. But seeing what its doing and I don't have much money in the first place to buy a new car- I'd rather keep my current car- which is still running pretty good. I don't want to help out hurting the economy any more than it is.  

[Pumona]

Latopazora

I seriously thought about taking advantage of the C4C program. But seeing what its doing and I don't have much money in the first place to buy a new car- I'd rather keep my current car- which is still running pretty good. I don't want to help out hurting the economy any more than it is.

They did make it sound really good huh? Free money if you get a new car. Too bad the Gov. doesn't have the money for it. Congrats on deciding not to do it.  

[Latopazora]

Pumona

They did make it sound really good huh? Free money if you get a new car. Too bad the Gov. doesn't have the money for it. Congrats on deciding not to do it.

For me to sell my car for 4500 would be a costly for me- I would have to replace it with a new car, not just a like-new used car, a new car. I don't even have to money to pay for a Toyota Yaris, which are $13k brand new. Besides, that Saturn really holds up for me, she still runs good and has a long way to go.  

[Raidoactive Kitty]

I think this is a great way to jump start the economy. It also brought in a few jobs at the same time.  

[Lord Bitememan]

Quote:

I think this is a great way to jump start the economy. It also brought in a few jobs at the same time.

Again, it's more likely that this will simply depress auto sales in the future. Furthermore, the other than an uptick in the dealership activity, this will not likely result in more automotive jobs. That would require long term increased sales in the auto-market. With Cash for Clunkers ending, it's likely that the economic engine front-loading the auto sales will shut down now.  

[Vasilius Konstantinos]

Raidoactive Kitty

I think this is a great way to jump start the economy. It also brought in a few jobs at the same time.

WHat jobs? And you do realize the $4,500 we are paying for right? What a wonderful way to stimulate the economy, by spending more money on pet projects like this which we are going to pay for in the future by creating more debt because we cannot afford to pay for it now, after we already spent the money designated to this project already, and failed.

Ridiculous. We jump start an economy by lifting the tax burden on business and deregulate the economy so businesses can hire people and these new workers can have a steady job. Obama is spending money we do not have. Notice the difference?