American Elephants


Crackpot Economics, Crackpot Environmentalism and Congress. by The Elephant's Child
August 16, 2009, 11:06 pm
Filed under: Economy, Energy, Environment | Tags: , ,

Clunkers

If you want a serious reason to oppose ObamaCare, take a look at the “Cash for Clunkers” program.  Officially it is known as the Car Allowance Rebate System (CARS) and it even has its own cute little logo with an automobile symbol in place of the ‘A’.  It was initially part of the Waxman-Markey climate bill that was spun off as separate legislation.  It was initially intended to encourage drivers to trade in older less fuel-efficient  cars for new cars with better fuel economy,  bringing car buyers into empty showrooms and lowering the fuel consumption of the American automotive fleet.

What it does establish is that Americans are not stupid.  When they are offered $4500 of someone else’s money — which on some models can be 1/4 of the price —  to buy a car, they take it.  The $1 billion of taxpayer money appropriated by Congress was exhausted within a week.  So Congress has appropriated another $2 billion.

One of the immediate problems is that the cars that are turned in are required to be crushed immediately.  Most would be perfectly good used cars for those who cannot afford a new car.  But removing them from use will starve the used-car market of inventory, thus driving up the price of used cars and probably bankrupting some small used car dealers. And then there is the parts question, for there is a big market for used car parts.  It is not known if there is a market at present for the scrap metal from the crushed cars.

It is also not known if there is any environmental benefit to the program.  The amount of carbon dioxide that is foregone by replacing cars with higher fuel consumption may well be insignificant compared to the energy required to crush and process the clunkers.  And if the newer vehicles are driven more and farther than the old ones — is there any net reduction in CO2?  And even if there is, the affect of  lowered CO2 may be insignificant in the atmosphere, since most of the CO2 in the atmosphere arises from the oceans, not our tailpipes.

CO2 is not a pollutant, contrary to a misguided ruling by the Supreme Court.  It is a colorless, odorless gas that is natural plant food, and essential to life.  The optimum amount of  CO2 in the atmosphere is about 1000 ppm, the current amount is around 400 ppm.  CO2 is only a trace gas in the atmosphere.

If all that was not enough, it seems that  Dealers are not being repaid for the $4500 they have advanced to car buyers.   Congress has supposedly appropriated the money,  but auto dealers haven seen any money, and it’s hurting.

Were the people who are rushing out to buy new cars with the benefit of $4500 of taxpayer dollars going to buy new cars anyway?  This is crackpot economics.  And it’s catching.  New Jersey and Vermont are now offering subsidies for those who turn in their old refrigerators and freezers.

Meanwhile, senators are considering a permanent clunkers program.  After all, it’s only money and  it is so very popular.  But then Paul always enjoys the gift of  Peter’s money.

ADDENDUM: Rep. Joe Sestak (D-Pa) has said that the government has only reimbursed 2 percent of dealers , and that 4 our of 5 applications have been rejected for “minor oversight.” The government has only 225  people processing the claims at the Department of Transportation.  They need 1,000 said Sestak.  Gosh, they cannot handle the original billion dollars worth of claims with two more billion to go.  And they are ever so sure they can handle the health insurance claims for 220 million people?  Where is the evidence of any kind of success at that, ever?




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