The program is called "cash for clunkers". It isn't "cash for people with newer cars". It isn't "cash for people with good used cars". It isn't "cash for people with antique cars". It isn't "cash for the poor or high-income car owners". No, it is "cash for clunkers".
If you don't have a old, nearly worthless, crappy car that spews out pollutants, and that you are driving until it finally kicks the bucket or if you aren't middle class -- then the program isn't for you. Don't fool yourself into thinking that the program was meant to do anything else. It is severely underfunded to have impact on other car categories.
It is intended to get these crappy and often dangerous cars off the road. It is intended to get some new car sales going from people who can afford a new car but who are waiting. It is intended to get some better fuel economy and thereby make a small dent in our dependency on foreign oil. It is intended to reduce pollution and make people healthier. It should make a small impact on all of those categories. Nothing major, but then it doesn't have enough funding to make any major impact.
This type of program has been sucessful in other countries. It has a multiplying effect. $1B in US spending would cover approximately 250,000 new cars (assuming half get $3500 and half get $4500). If the average new car bought was $20,000, then the car manufacturers / part suppliers / dealers get 250,000 * $20,000 = $5B. Even if only half of that money went to US companies, then the US companies get $2.5B injected for just $1B of government money. That is far better than the US goverment just giving money to the car companies as it has been over the last few months (and it doesn't violate free trade agreements). Since that $2.5B is eventually profit or income for someone, the US government gets nearly the full $1B back in taxes AND it can get a nice profit from selling all those scrapped car parts.
Leave it to P&N to complain about a program that nearly pays for itself, is not full of government inefficiencies and in fact has a multiplicitive effect, reduces the need for government ownership of companies, helps US companies, reduces dependency on foreign oil, reduces pollutants, and helps middle class citizens.