Full Disclosure: I actually made a little bit of money off of a program that we sold at Cox Radio Jacksonville that was based on the Cash for Clunkers legislation.
Now that that’s out of the way let’s review the post-mortem of the “wildly successful” (according to White House minions) program that allowed consumers to trade in low mpg cars for higher mpg and receive a credit of $3500-$4500 towards the purchase of that new car. As with most Government programs that have good intentions- in this case it was to decrease carbon emissions and boost the automotive industry- the end result was typical. However, once again, unintended consequences will put the program squarely in the “failure” category.
It sold cars. In fact it sold so many cars that news out of Detroit says that both Ford and GM plan on increasing production the rest of the year to fill up empty lots that are barren because of the program.
It will have a minor impact on the environment.
It caused Automotive advertisers to spend again! Certainly worth it for someone in advertising and media where a huge portion of our income is based on automotive spending.
Taxpayers are paying for this. Taxpayers are actually paying for the destruction of useful property.
It puts a whole new mass of the population who were not in debt for a car payment in debt. How long will it take for a portion of them to run into payment problems? Another bubble folks.
Used car prices are spiking. Now cars that lower income consumers could afford are being destroyed.
Charities that use unneeded automobiles to auction for their money are losing critical funding.
The program simply delayed a worse 2010 in the automobile industry.
Car dealers are not getting paid. Like most government bureaucracies the response and demand was misjudged. Car dealers were backing out before the program was to end, another reason to never trust these kinds of programs.