An article today in the Wall Street Journal reported that the per car cost of the additional sales generated by the Cash For Clunkers program was approximately $24,000 per car. Wow! Perhaps it would have been better if we just gave each of the participants a car. We could have given them an American car, which would certainly have made a difference to the American auto industry.
Why bother with setting up a cumbersome program that stimulates foreign auto sales and costs enough to give the cars away. And the argument that we removed a greater number of older, polluting vehicles from the road, while correct, is difficult to justify, considering the cost. The realities of the program are that it was an artificial, temporary, and costly stimulus that failed to create a lasting effect in the industry. And now that it appears that the First Time Buyer Tax Credit will be extended, I can’t wait to see its final cost.
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