With the end of the failed “recovery summer” – and the President proposing yet another $50-billion “stimulus” – it is worth reviewing one administration economic program touted as a “success.” But even the celebrated “Cash for Clunkers” has been an expensive and bumpy ride for many American consumers, just as critics warned. With a sticker price of $3 billion, “Cash for Clunkers” has earned the latest Budget Boondoggle Award.
The program – formally the Car Allowance Rebate System – paid consumers $4,500 each for trading an old auto for a new one with better gas mileage. The trade-ins were then destroyed. The government quickly fell behind on reimbursing auto dealerships. “We’re now slightly victims of success,” the President declared, “ . . . there was so much more demand than anybody expected, that dealers were overwhelmed with applications.”
It was indeed successful, notes columnist Jeff Jacoby of The Boston Globe, “if you define success as getting people to take ‘free’ money to make a purchase most of them are going to make anyway, while simultaneously wiping out productive assets that could provide value to many other consumers for years to come.” In the process, a lot of Americans became victims of the administration’s attempt at market control.
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