Clunker of a policy? Yup.
I got cash for my clunker, but the program – which ends Monday – hasn't done much to stimulate or green the economy.
As I am not a contractor, banker, hedge fund manager, government insider, or political activist, I didn't expect to benefit personally from the various bailouts and stimulus programs out there. Then came the "cash for clunkers" program.
Although not as outrageous as about half the projects in the stimulus package, it doesn't do much to stimulate the economy or to improve overall gas mileage. Still, the program proved so popular that they're having to pull the plug on the program on Monday when it runs out of money.
Who wins? Middle-class folks like my wife and me who can afford a new car and happen to have an inefficient trade-in receive a $4,500 subsidy to do what we would eventually need to do anyway. This benefits car dealers, also, but the losers are charities that benefit from car donations and less well-off people who rely on a stock of solid older cars for their transportation. When these are crushed and melted, there will be fewer choices and the price of the remaining vehicles will rise.
Although fairly rational in other respects, I form deep personal attachments to our vehicles, so I take some offense at the "cash for clunkers" label. Cars are not merely mobility appliances to me; they are more like pets – or mechanical companions, if you will.
My wife points out that my affection for cars is somewhat indiscriminate, as it also includes my first – a 1959 Hillman Minx that immediately threw a rod and required a summer of reconstruction to get back on the road.
So I rationalize our subsidy as an anticipatory repayment for the tax increases that will surely reach into the middle class before long.