Cash For Clunkers: Now With Triple The Funding!
Last night I posted about the $1 billion federal “cash for clunkers” subsidy, which was supposed to last to the end of this year, being used up in less than a week. Today comes news that Congress is tripling the funding for the ridiculous program which will serve to subsidize overconsumption of new cars and will drive up prices in the used car markets as the cars getting traded in are destroyed.
WASHINGTON (AP) – The House has voted to rush an additional $2 billion into the popular but financially strapped “cash for clunkers” car purchase program.
The bill was approved on a vote of 316-109. House members acted within hours of learning from Transportation Secretary Ray LaHood that the program was running out of money.
Called the Car Allowance Rebate System, or CARS, the program is designed to help the economy and the environment by spurring new car sales. Car owners can receive federal subsidies of up to $4,500 for trading in their old cars for new ones that achieve significantly higher gas mileage.
The idea that we can help the economy by deficit spending on subsidies so that people can buy cars they don’t need with car loans they also don’t need is ridiculous. The idea that we are helping the environment by subsidizing demand for new cars that wouldn’t exist otherwise is ridiculous.
And on top of it all, let’s not forget that the destruction of these traded-in cars reduces the total number of used cars available on the market. Thus driving up prices for used car shoppers who, last time I checked, tended not to be very rich.
Our government is spending tax dollars it doesn’t have to subsidize new cars for people who don’t need them. And rather than learning their lesson from this boondoggle falling flat on its face less than a week after being implemented, Congress is appropriating more money to the program.
And why not? It’s just other people’s money.
