Underfunded, Government considering scrapping Cash for Clunkers

[TheSkinsFan]

Originally posted by: themusgrat

Originally posted by: TheSkinsFan

Originally posted by: waggy
I been looking for a used car for my SIL who is living with us. i wanted to spend around $1k. up until this week they were everywhere for a decent price. guess what? the people either traded it in or jacked the price up. we looked at one car (a old buick) that the guy wanted $900 for. We went back to look at it again and he wanted $2k now because of the ability to trade it in for more.

While I too think that this entire program was ill-conceived and wrong from the start, I must say that whoever was raising their used car prices because of it is a complete idiot. The program requires buyers to have a registration and insurance on their vehicle for at least one year prior to the trade.

The program itself was nothing more than a taxpayer-sponsored lottery win for roughly 300k used car owners. Swell. :roll:

It was also a huge boost to the economy and was by far worth it, no matter how stupid it started out to be. I agree, the government has no business buying up used cars. At the same time, the government has no business propping up the economy with its own money. So if it's going to do the latter, and the former will do far more than the latter to boost the economy, I don't see why not.

In the end the program was a huge success. The economy needed that money to be spent.

The effectiveness -- especially the oft ignored psychological aspect -- of this program was certainly better than the other 99.999% of the "stimulus" money, I'll give you that much. I still don't like any of it...

 

[Possessed Freak]

Originally posted by: OCguy
Damn jpeyton, you almost got to trade in your 1996 Saturn!

My 1994 Saturn just passed inspection needing NOTHING. The s-series are way too fuel efficient to qualify for CARS.

 

[Patranus]

The problem is that the cars are built with borrowed/printed government money
that money goes to suppliers and is taxed to pay for government
money borrowed/printed to pay for the rebates
that money goes to consumers and is taxes to pay for government

If this doesn't sounds like a "stimulus bubble" I don't know what is a bubble.

 

[Praxis1452]

Benefits:
-Has cleared X amount of older and less gas efficient cars off the road
-Has probably increased revenue for dealerships
-Allowed certain people to buy cars they otherwise would not have bought

Consequences:
-Cost $1 billion if not more due to overrun
-Someone pointed out that this will clear cars that may need lots of maintenance off the road, maintenance that would've given revenue to auto shops
-Not all cars were a large step up unfortunately
-Has rewarded those that have bought less gas efficient vehicles.

I have been against all bailouts and stimulus packages including this one. I can't be bothered to argue about whether it's dems or reps that caused this blah blah blah. The only thing I have a problem with is that it rewards those that have driven larger less gas-efficient vehicles in the past, again rewarding those who have chosen those larger inefficient vehicles, many of which were made by US auto manufacturers. Why can't people just suffer for their mistakes. Companies fail -> Bailout (of course for the public good:roll🙂. People make a bad choice buying american cars -> give them money to buy better cars. People made the choice, but hey, fuck you if you chose to save on fuel: No $4500 for you.

 

[StageLeft]

Originally posted by: sandorski

Originally posted by: Skoorb

Originally posted by: themusgrat

Originally posted by: Skoorb
A billion is not a huge boost to this economy. It represents .0000714% of the GDP. It is a tiny fraction of a single day of economic activity for the country!

It's not the 1bn that was spent on the economy. It was the many, many of other billions that were spent buying the cars. Someone earlier said that the people who used the program were mostly the ones who could afford to buy them in the first place. That person was right, it took money from people who could afford it and gave it to a rather large and failing industry, the auto industry. In every way was it a success and a boost to the economy. Also numbers can be misleading. Industries are all linked in some way, so believe me, let's pretend that the auto industry represents 1% of our GDP. Let's pretend that tomorrow it all goes to hell. The whole stock market would feel that for months, years, and the drop in stocks would be much more than 1%. I'm sure there's a technical explanation for this but I just don't know it.

Let's pretend that none of these people were going to buy a car otherwise. Let's also assume that the average new car's price was $25k, or 5X that billion. So now we have 5X the $3 Billion or .00105 GDP Even if we continue to extrapolate out in almost impossible to quantify ways about other benefits to the economy it's really quite impossible to pretend this is anything but piss on a bonfire; it will have no significant impact on the economy as a whole because the economy is too big to care about it.

You're thinking too small. There are a lot of People who won't Buy anything right now, this Program has pushed some of those People into making a Purchase. It doesn't really matter if they could "Afford" it without the Program, they were not going to Buy out of Fear/Caution. Which is quite common during a Recession.

I realize I just kind of hate this program and can argue it from various stances, but if anybody is thinking too small it's uncle sam. Forget this $1B rubbish. Give everybody $10k to buy any car new or old. Limit the program at $1T. Then we'll see what stimulus happens 🙂

 

[cubeless]

they supposedly just allocated $2b more... double down!!! couple more doubles and we're talking some real money...

 

[Stuxnet]

lol @ double down!

 

[juiio]

Originally posted by: Praxis1452


Benefits:
-Allowed certain people to buy cars they otherwise would not have bought

That is a consequence for many people, not a benefit. How many of these people can't actually afford the car that they are now buying?

 

[sandorski]

Originally posted by: juiio

Originally posted by: Praxis1452


Benefits:
-Allowed certain people to buy cars they otherwise would not have bought

That is a consequence for many people, not a benefit. How many of these people can't actually afford the car that they are now buying?

If there are any, I suspect it will only be because they'll be Laid Off sometime in the future.

 

[Uhtrinity]

Originally posted by: cubeless
they supposedly just allocated $2b more... double down!!! couple more doubles and we're talking some real money...

There is talk about making it permanent. But if they do they really need to be more stringent on the mpg standards.

 

[Patranus]

Here is a semi related question.

What is the government going to do with all of the people who ride motorcycles? Will it offer some sort of cash trade in?

I only ask this because if there is government run health care in the future, the government must limit the types of risky behavior people participate in, especially those that CLEARLY have negative effects on ones health and viable alternatives such as driving a motorcycle vs driving a car.

 

[themusgrat]

If the government ever outlawed motorcycles on the grounds that it costs UHC too much money, I'd hope that we'd be smart enough to behead everyone who voted for that on grounds of high treason against our natural right to ride motorcycles. Seriously, that's pretty retarded, and it will be along time before anyone suggests it.

If you want to go down that road, ask yourself when the government will outlaw smoking or refuse to do work on patients with lung/throat cancer. Or maybe the government will refuse to give liver transplants to people who drink. Who knows, once our government gets ahold of something, they don't let it go.

 

[Red Dawn]

Originally posted by: Patranus
Here is a semi related question.

What is the government going to do with all of the people who ride motorcycles? Will it offer some sort of cash trade in?

I only ask this because if there is government run health care in the future, the government must limit the types of risky behavior people participate in, especially those that CLEARLY have negative effects on ones health and viable alternatives such as driving a motorcycle vs driving a car.

Well it would be even more unhealthy for those trying to take Motorcycles away from a lot of Bikers but you are more than welcome to try. Tell you what, locate some Mongols and insist they give up their Bikes.

 

[StageLeft]

Make it perm with what money?

Anyway if they do, they should, as they should have done already, drop (at least so I can make use of it) the nonsense about a maximum mileage and instead go percentages. It's silly that if i upgrade from a 16 to an 18 mpg vehicle I can get $4500 but if I have a car that gets 20 and I want to upgrade to one that gets 38 I can get nothing. The market would be opened way up with some other kind of a scale.

Still, this ultimately is equivalent to dropping money from airplanes.

 

[Patranus]

Originally posted by: themusgratOr maybe the government will refuse to give liver transplants to people who drink.

That happens all of the time in England.

The point is that the government will have to mitigate costs. The vast majority of motorcycle accidents have much more injuries when compared to car accidents. Right now the free market takes care of that with higher premiums, risky behavior means you pay more. With single payer/government run system you eliminate that from the equation.

With the example of tobacco use, tobacco products are taxed to death. Is the government going to institute a "risky behavior tax"?

Sorry to go off topic.

 

[Engineer]

Originally posted by: Skoorb
Make it perm with what money?

Anyway if they do, they should, as they should have done already, drop (at least so I can make use of it) the nonsense about a maximum mileage and instead go percentages. It's silly that if i upgrade from a 16 to an 18 mpg vehicle I can get $4500 but if I have a car that gets 20 and I want to upgrade to one that gets 38 I can get nothing. The market would be opened way up with some other kind of a scale.

Still, this ultimately is equivalent to dropping money from airplanes.

I have not heard this but I agree with you. Double your mileage from a good car to a great car vs the extra 2 from shitty SUV to almost shitty SUV....you get Jack Squat. I guess I can also complain that only first time home buyers get the credit and I don't...shit, I'm pissed! :|

 

[sandorski]

Originally posted by: Patranus

Originally posted by: themusgratOr maybe the government will refuse to give liver transplants to people who drink.

That happens all of the time in England.

The point is that the government will have to mitigate costs. The vast majority of motorcycle accidents have much more injuries when compared to car accidents. Right now the free market takes care of that with higher premiums, risky behavior means you pay more. With single payer/government run system you eliminate that from the equation.

With the example of tobacco use, tobacco products are taxed to death. Is the government going to institute a "risky behavior tax"?

Sorry to go off topic.

If someones Bad Habits means that an Expensive Healthcare Procedure will be for nothing, refusing to Pay would be Justified. Especially with a Transplant(using your Alcoholic example) you have to take all sorts of nasty Drugs and I'm sure at least one is going to conflict with Alcohol(could be wrong).

At least give them choice to Quit.

 

[Uhtrinity]

Originally posted by: sandorski

Originally posted by: Patranus

Originally posted by: themusgratOr maybe the government will refuse to give liver transplants to people who drink.

That happens all of the time in England.

The point is that the government will have to mitigate costs. The vast majority of motorcycle accidents have much more injuries when compared to car accidents. Right now the free market takes care of that with higher premiums, risky behavior means you pay more. With single payer/government run system you eliminate that from the equation.

With the example of tobacco use, tobacco products are taxed to death. Is the government going to institute a "risky behavior tax"?

Sorry to go off topic.

If someones Bad Habits means that an Expensive Healthcare Procedure will be for nothing, refusing to Pay would be Justified. Especially with a Transplant(using your Alcoholic example) you have to take all sorts of nasty Drugs and I'm sure at least one is going to conflict with Alcohol(could be wrong).

At least give them choice to Quit.

Definitely off topic, but a person in the US can already be denied an organ due to unhealthy behavior. Example, person is an alcoholic with a bad liver ... gets denied a transplant in favor of someone with liver cancer.

 

[charrison]

Originally posted by: Engineer

Originally posted by: themusgrat

Originally posted by: Skoorb
A billion is not a huge boost to this economy. It represents .0000714% of the GDP. It is a tiny fraction of a single day of economic activity for the country!

It's not the 1bn that was spent on the economy. It was the many, many of other billions that were spent buying the cars. Someone earlier said that the people who used the program were mostly the ones who could afford to buy them in the first place. That person was right, it took money from people who could afford it and gave it to a rather large and failing industry, the auto industry. In every way was it a success and a boost to the economy. Also numbers can be misleading. Industries are all linked in some way, so believe me, let's pretend that the auto industry represents 1% of our GDP. Let's pretend that tomorrow it all goes to hell. The whole stock market would feel that for months, years, and the drop in stocks would be much more than 1%. I'm sure there's a technical explanation for this but I just don't know it.

I had a co-worker who just bought a $49,000+ Buick Enclave on this program. Traded his old truck (extended cab, extended bed, full time 4x4 Dodge V8 - 11 mpg actual average with 450,000+ miles on it). Sure, he received $4,500 in stimulus from the program, but he still spent $39,000+ out of his own pocket (after discounts). Looks like "trickle UP" to me.

But the real question is, is this a purchase that would have happened anyway? While on the surface it would appear that it only costs at most 4500 per car sold, it is more complex than that.
IF all these cash for clunkers trade in would have happened anyway, this pacakge gets far more expensive.

But I would generally agree this is better than a 50B loan to GM/Chrysler.

 

[Craig234]

Originally posted by: Engineer
I have not heard this but I agree with you. Double your mileage from a good car to a great car vs the extra 2 from shitty SUV to almost shitty SUV....you get Jack Squat. I guess I can also complain that only first time home buyers get the credit and I don't...shit, I'm pissed! :|

Or, you could look at the facts I already posted - instead of the worst case you mention, that IIRC the average mileage increase was 69%.

 

[extra]

Originally posted by: MIKEMIKE
http://www.msnbc.msn.com/id/32228179/ns/business-autos/

when you rush through, an underfunded bill, this is what happens, it creates a mess...

http://www.freep.com/article/2...unkers-to-be-suspended

Seriously? Man, I thought I'd seen spin, but this is just WAYYYYY the hell out there.

Here, let me give an analogy of your post!

1. Widget and sprocket company announces today that they are producing 100,000 100th anniversary collectors edition widgets!!! They estimate that if you wish to get one you will need to purchase one in the first two months because they will run out of them.

2. The anniversary edition widget is a smashing success and the company sells all 100,000 of them in a week and true to their word isn't going to make any more!

3. MIKIEMIKE comes to anandtech p&n forum and makes thread saying "Widget and sprocket company scrapping under-produced widget".

 

[Whoozyerdaddy]

Originally posted by: senseamp

Originally posted by: TheSkinsFan

Originally posted by: senseamp
Yeah, use the savings to provide health care to uninsured.

RTFA next time.

There won't be any "savings." As usual, the good 'ole Government bureaucracy may have already, in less than one week, gone OVER their $1 billion budget for the program due to a large backlog in the processing of the deals in the government system.

Doesn't really help your argument for Government-run anything, does it?

Sure it does.
They suspended the program out of concern it will run over its allocated budget. Sounds like a prudent thing to do.

Of course it was... would you agree to end socialized health care based on the same premise?

Edit: To reinforce the incompetence of the Obama administration and as an example of why we should kill the health care bill... Their car program went bankrupt in less than a week. This was supposed to be a big deal. Less than seven days later they're begging for more money (in fact borrowing from other programs) to stave off the appearance of an epically failed program.

Yes...

I want these people in charge of my health care. They obviously have a grasp on monitary policy. At the very least they know how to estimate the demand on their give-away programs. :disgust:

 

[Engineer]

Originally posted by: Craig234

Originally posted by: Engineer
I have not heard this but I agree with you. Double your mileage from a good car to a great car vs the extra 2 from shitty SUV to almost shitty SUV....you get Jack Squat. I guess I can also complain that only first time home buyers get the credit and I don't...shit, I'm pissed! :|

Or, you could look at the facts I already posted - instead of the worst case you mention, that IIRC the average mileage increase was 69%.

No, you misunderstood what I'm talking about. I know full well that there are some substantial gains in the MPG for some of the cars being traded. My point was is that I can't take a good car (24mpg for example) and go to a great car (40mpg Fusion for example) and get a credit. Of course, the whole idea is to get rid of the clunkers from the highway and a 24mpg car would not be a clunker. That's all.

 

[umbrella39]

Originally posted by: Red Dawn

Originally posted by: Patranus
Here is a semi related question.

What is the government going to do with all of the people who ride motorcycles? Will it offer some sort of cash trade in?

I only ask this because if there is government run health care in the future, the government must limit the types of risky behavior people participate in, especially those that CLEARLY have negative effects on ones health and viable alternatives such as driving a motorcycle vs driving a car.

Well it would be even more unhealthy for those trying to take Motorcycles away from a lot of Bikers but you are more than welcome to try. Tell you what, locate some Mongols and insist they give up their Bikes.

You might want to inform Zendari lite that Genghis Khan is not the kind of Mongol you are talking about 😉 He's confused.

 

[charrison]

Originally posted by: Engineer

Originally posted by: Craig234

Originally posted by: Engineer
I have not heard this but I agree with you. Double your mileage from a good car to a great car vs the extra 2 from shitty SUV to almost shitty SUV....you get Jack Squat. I guess I can also complain that only first time home buyers get the credit and I don't...shit, I'm pissed! :|

Or, you could look at the facts I already posted - instead of the worst case you mention, that IIRC the average mileage increase was 69%.

No, you misunderstood what I'm talking about. I know full well that there are some substantial gains in the MPG for some of the cars being traded. My point was is that I can't take a good car (24mpg for example) and go to a great car (40mpg Fusion for example) and get a credit. Of course, the whole idea is to get rid of the clunkers from the highway and a 24mpg car would not be a clunker. That's all.

I agree the rules could have been much better. There should have been a rebate as long as the person is trading up and it would not matter if the car is new or used. RIght now this program is just a subsidy for rich.

And any car manufacturing without a catalytic converter would get a rebate. There are probably not many of these left of the roads, but they spew far more pollution than any modern engine.