Cash For Clunkers Program Gets An Extra $2 Billion, Fails Miserably

The popular but ill-fated Cash For Clunkers program got a much-needed cash infusion in the face of significant criticism (including my own) today, with the Senate approving an additional $2 billion for the program, bringing hope to an American public aching to trade in their clunkers for cash.  This amounts to a big vote of confidence by Washington lawmakers, who effectively tripled the program’s budget with the stroke of a pen.

Still Under-Funded And Ill-Advised

Despite the seeming “success” of the program, it has still only managed to move around 180,000 new automobiles, the equivalent of about a week’s worth of sales volume.  Even with the next extension, we’re only looking at another 300,000-400,000 in total new auto sales.  That’s a lot of automobiles to be sure, but it still amounts to less than a month’s worth of supply.  I wonder, is it worth $3 billion to let a few tens of thousands of Americans keep their jobs for another month?

I exaggerate, but that’s basically what this program comes down to.  I don’t believe it will improve the average fuel efficiency of the American auto fleet significantly and those who really need help, the poor, won’t be able to afford to take advantage of the program anyway.  The Cash For Clunkers program is nothing more than a giveaway to the middle class (and higher).  It’s not that I think the middle class doesn’t deserve a break, it’s that I believe that money could be much better spent helping to feed the poor and subsidize health coverage for the uninsured.  Do we really need more Ford’s on the road?

Most Of The Money Going To Foreign Manufacturers

It might not be so bad if the program was limited to American-made automobiles, but 6 of the 10 best-selling cars under the Cash For Clunkers program are foreign, according to CNN Money.  While the Ford Focus did manage to grab the top spot, the next American automobile on the list comes in at number 6 (Ford Escape), with the Chevy Cobalt bringing up the rear at number 10.  Call me crazy, but I think if we’re going to waste money, it should at least go to American companies.