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Author: Subject: "Cash for Clunkers" government car program
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[*] Post 384452 posted on 31-7-2009 at 13:04 Reply With Quote
"Cash for Clunkers" government car program

The idea of the program was to give an incentive of up to $4500 for people to trade in their gas-guzzling old cars toward getting new, more fuel-efficient cars. The US government funded the program, which was intended to run through November.

How has it worked out? How wise are politicians when they intervene in business?

The dealers are frustrated with the paperwork. They report a single sale under this program takes about five hours to complete all the forms.

Some car owners with poor mileage cars are frustrated, because their cars don't qualify. Suppose you own a car of which the government test model got 20 mpg when it was evaluated. Your car, in real life, gets twelve mpg (perhaps the fuel injectors do not all function optimally, or one of the spark plugs has trouble getting fouled with oil). In REAL LIFE, this is a car that gets bad mileage and should be replaced. But, government and politicians don't conform to real life--in their imaginary world, which they look up in a book, the car doesn't qualify for the financial help.

The law requires that the engines of the cars and trucks traded in be destroyed (by running them without oil until the engine seizes up, with a chemical put in instead of oil). What a shame, when there are hundreds of thousand, perhaps millions of people who cannot afford to buy a car, but they need a car to become employable. If these cars could have been given to them, they would have had a chance--but, that's not what the program is for.

Normally, the poor, who can hardly afford a car, buy a vehicle from its third or fourth owner. Perhaps they can only afford to drive when they must--to work, to the laundromat, and to buy groceries. When the older cars are destroyed, they are not available to the poor who can only afford $1000 or less for a vehicle. They are getting a rotten deal.

Now, the "Cash for Clunkers" program is suspended, because the money is thought to have run out. The government is warning the public not to count on actually getting the money that the government promised. Do you notice a difference between the present date, and the month to which the program was supposed to extend? Do you think it might indicate that the politicians are too stupid to plan such an operation?

What do you suppose will happen to people who have turned in their older cars (and so the cars have been destroyed) if the government payment doesn't come? Or, if the car dealers have signed off on the buyer owing a certain amount (since the car dealer expected government reimbursement for $4,500), what will they do? What if they have sold 100 cars on this program, and the government money allocated for the program was already spent?

Some car companies have sold cars with the promise that they will take over the payments for up to a year if you lose your job (because they thought that people were unwilling to buy because of job uncertainty). How many people will lose their jobs, with the result that the car companies will be MAKING PAYMENTS TO THEMSELVES for a year? How can they make any profit doing that?

This is a horrific mess. But, it could be worse--at least the government is not screwing up health care for most of the general public. Government incompetence ought not be allowed to kill us.

What do you think of "cash-for-clunkers"? Did you expect it to work out better than it has? Are you surprised when politicians dream up programs that have unforeseen problems? Is it any wonder that the money ran out months ahead of time?
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[*] Post 384469 posted on 31-7-2009 at 13:58 Reply With Quote

De ja vous!
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[*] Post 384471 posted on 31-7-2009 at 14:03 Reply With Quote

A similar programme has been a success over here in as much as there are more old cars off the road and more new cars being sold.

scrappage and how it works

However the price of cars has apparently been hiked up so that those who did not have older cars are now paying more which does not seem fair at all.

Which finance
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