Cash for Clunkers–Big Success?

August/01/2009 18:45PM
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Washington is pretty proud of their Cash for Clunkers program. But, like all government programs there are some flaws. Flaws for cars are one thing, but flaws for health care might cost you dearly.

First, the plan wasn’t Washington’s idea. Germany has been running a similar plan this summer. But, it appears Washington did not study the German plan, just adopted their version of a plan. Good planning is usually needed for a plan as complex as this plan. Not in our country. We have a plethora of fools on both sides of the aisles who couldn’t organize a snipe hunt. I don’t know of any time in my life when we have such a sad collection of idiots churning out laws at such a rapid pace they can’t read them or think about why we need them.

Big flaw number one. The program was intended to last four months. It ran out of money in four days. The National Association of Auto Dealers did a poll and warned the government, which wasn’t paying attention. Even my liberal friends will understand this is a big flaw. Dealers had spent millions on advertising this deal. If the plug had been pulled Friday night, this would be a big problem for the dealers and Washington. Can you say lawsuits? So, another $2 billion needed to be found on the fifth day. That money isn’t official, but dealers have been told to keep selling. Today, the government says sell through Sunday. McCain and other Republicans and some Democrats say they will not vote for the additional money. They say it’s just another government handout. Dealers, can you say nervous about whether you will be repaid by a government with low trust?

Then there’s the little issue of you paying for these nice people to get a new car. Most of us got pretty upset with the help your neighbor pay his mortgage deal. If your tax bill was $18,000 for last year, you helped at least 4 people buy new cars this week. Happy?

Then there’s flaw number three. The dealer has to go out of pocket for the rebate either $3,500 or $4,500. Then you follow the 136 page government document and fill out tons of paperwork to get your money back. If you violated any rule, you may not get your rebate. So far, only $150 million has been paid back to the dealers.

Flaw number four. The EPA issued revised mileage figures for 150 models last week. Isn’t that cute? So, what happens if you relied on the old mileage figures on the EPA’s website? The answer, if you bought before July 24 and used the old number, you are OK, after July 24, tough beans.

Flaw number five. Auto manufacturers have had plants shut down for the summer due to the economy. Many dealers say the clunkers deal is running them out of inventory. So, what do they sell for the next four months until the supply pipeline gets refilled?

Flaw number six, some states won’t get the sales tax on the rebate. So, states with broken economies are helping pay for this too.

Flaw number seven, car manufacturers need to raise prices on new models to get back to profitability. They are worried that this program will make that harder or they will just raise prices and take the rebate.

Flaw number eight. The panic of money running out is creating a stampede at dealerships. People are walking out mad since there are not enough sales people to handle the demand and the program is so complex that it takes a lot of time to confirm the car and the deal meet the requirements.

Flaw number nine, this takes hundreds of low-cost cars off the road. The types of cars poor people buy. Plus, it takes the parts from those cars from the junk yards where poor people buy parts to keep their old cars running.

There will be lot’s of discussion over the good and bad news from this program. The car dealers will spill the beans about the mess this plan really is for them and their customers. When some of these issues don’t qualify and the dealer is out of pocket, there will be lot’s of noise.

Arizona had a plan similar to this a few years ago. If you bought a car or truck that ran on alternative fuels, you got a rebate. The program didn’t put a lid on it. In mere days millions of dollars in rebates were rung up. The buyers never ran the vehicles on the alternative fuels since those fuels weren’t readily available. So, millions of taxpayer dollars were spent, the state had a budget problem, and Jane Hull, the governor who signed this into law, was not reelected.

It’s just like not looking at Canada for their health care problems. Washington is running a slap dash system with speed running far ahead of thought and wisdom. If you think there is a health care reform bill coming out of this congress that will work, just look at how well this worked.

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