The End of “Cash for Clunkers”

Michael Giberson

News reports indicate that the federal government is winding up “Cash for Clunkers” early next week on the expectation that claims will exhaust the $3 billion committed to the program.   Just noticed this comment by Robert Barro of two weeks back (HT to Paul Walker/Anti-Dismal):

The most ludicrous (though, fortunately, small) intervention thus far has to be the cash-for-clunkers program. It’s not surprising that subsidising people to destroy old cars would raise GDP, because measured GDP includes the replacement cars but not the value lost from destruction. Why not also blow up houses and factories and then enjoy the expansion of GDP from the replacement investment? (Actually, it’s best cosmetically to blow up refrigerators and other consumer durables because GDP does include rental income on houses and factories.)

ADDENDUM: Chris Edwards nominates “Cash for Clunkers” as the dumbest government program ever.  While it makes a tempting target, I’ll note that the “Economic Analysis of Scrappage” article I cited last week reports on a 1990 analysis of a “cash for clunkers” program that compares it to Corporate Average Fuel Economy (CAFE) regulations.  The result (and I’m paraphrasing just a bit here): CAFE is much dumber.

One thought on “The End of “Cash for Clunkers”

  1. Democrats, realizing the success of the President’s “Cash For Clunkers” rebate program, have revamped a major portion of their National Health Care Plan.
    President Obama, Speaker Pelosi, and Sen. Reid are expected to make this major announcement at a joint news conference later this week. I have obtained an advanced copy of the proposal which is named….
    “CASH FOR CODGERS” And It Works Like This…
    Couples wishing to access health care funds in order to pay for the delivery of a child will be required to turn in one old person. The amount the government grants them will be fixed according to a sliding scale. Older and more prescription dependent ‘codgers’ will garner the highest amounts.
    Special “Bonuses” will be paid for those submitting codgers in targeted groups, such as smokers, alcohol drinkers, persons 10 pounds over their government prescribed weight, and any member of the Republican Party.
    Smaller bonuses will be given for ‘codgers’ who consume beef, soda, fried foods, potato chips, lattes, whole milk, dairy products, bacon, Brussels sprouts, or Girl Scout Cookies.
    All ‘codgers’ will be rendered totally useless via toxic injection. This will insure that they are not secretly resold or their body parts harvested to keep other ‘codgers’ in repair.

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