Cash-for-Clunkers is a very EFFICIENT Keynesian Stimulus program

[scheming daemons]

Money goes DIRECTLY to people, quickly, and they spend it immediately.... on goods from a struggling industry.


In the meantime, large fuel efficiency gains are made on every car bought under the program.

[Bicoastal]

1. What?! Cash-for-Clunkers was devised in KENYA?!

I KNEW it!!

:tinfoilhat:

[reflection]

10. .

:rofl:

[ColbertWatcher]

14. LOL! n/t

[Raven]

2. Exactly! You really have to stick your head waaaay up your ass not to see that. But

I still think Obama should have sent Bush & Cheney to NK and traded prisoners. That would be a perfect score!

[sandnsea]

3. It does go to the upper 1/3 though

Maybe the upper 25%. I doubt there is anybody in the bottom 50% using the program. That is true. It is why low income people quit voting. You have to be on welfare or rich to get any DIRECT benefit from the government.

Clearly the economic stimulus and environmental benefit helps everyone though.

[blue_onyx]

6. I doubt it.

"It does go to the upper 1/3 though. Maybe the upper 25%. "

The people our local news has spoken to at local dealers are definitely not upper income people.

[sandnsea]

8. Define upper income

Maybe you and I have a different definition.

[blue_onyx]

11. I was using your definition

You said the top 25-33.3% were benefiting. I'm not sure what would be considered "top 25%"...I was thinking around $75,000 household income.

[sandnsea]

28. Somewhere in that area

And they are mostly the ones who will benefit. There are others who don't qualify who are making other purchase options though. That's a good side benefit.

http://www.independentmail.com/news/2009/jul/31/anderson-dealers-say-cash-clunkers-program-bringin/

[cascadiance]

41. Maybe the middle 1/3rd..

Most people in the higher classes don't hold on to "clunkers". They get rid of them. This is for those people who've been holding out to buy a newer car (whether used or new), and perhaps were increasingly doing so as their investments tanked and their jobs were either lost or not secure, so that the car they owned was really starting to become a piece of crap, that they were willing to continue to ride into the ground, and needed something of value to get them to do it now.

[cascadiance]

42. Perhaps the program could be revised to offer $3000 or the like of public transportation passes...

... in the cases people can't afford to buy a new car. That way you still get the older clunker gas guzzlers off the road, and those who can't afford to buy a car still get some subsidized transportation costs, and it basically doesn't cost the government much at all, since it goes back to the government in terms of usage of mass transit and increases demand for it and helps us build up that infrastructure more to with more jobs associated with it as well.

Won't help the auto industry, but these people would be staying on the sideline for this program anyway, and wouldn't be a factor to the auto industry without anything else changed. But cities also need an infusion of demand and fees to help them build out newer mass transit systems too, which in the future those at the bottom of the scale should be winding up using more than their own cars anyway.

[AndyA]

4. And perfectly good vehicles are being destroyed.

Damaging the environment in the process.

They drain the oil out of the engines, pour in a compound that hardens with heat, and start the motors and rev them up. As the engines start to seize, they get very hot, and begin to burn off oil residue and sludge deposits built up in the engine. This pollution pours out the exhaust pipes into our environment.

Multiply this by however many thousands of cars are being turned in, and you have a real nasty environmental concern. Yet no one seems to be talking about that.

And what about all the cars that didn't qualify? The rusty, smoking, unsafe pre-1983 vehicles? Or the cars owned by people too poor to afford a brand new one? They just get squat.

This could have been a really great program if it had been done properly, but in typical fashion big business gets the benefit, as do those who have money, and the people without get...nothing.

Mother Nature is thrilled to have all the pollutants spewed out into the environment, too. How many miles to you suppose those vehicles could have been driven before doing that much damage? :shrug:

[scheming daemons]

5. They're not "perfectly good"... they are gas guzzlers, by definition

They only qualify if they're rated at less than 15 miles per gallon.

The one-time environmental "hit" when they are destroyed is worth the years of benefit by having the owner driving a 25+ MPG car instead of a <15 MPG car.

[AndyA]

7. Wrong. They are perfectly good, safe vehicles in most cases.

You have to consider the natural resources required to build the "clunker" in the first place.

Then the environmental damage when they force the engines to seize up.

Then the natural resources required to build the new replacement car.

Another 10 miles per gallon will take YEARS to recoup the damage done.

Plus, people with less efficient cars are likely to use them more efficiently since fuel is so expensive. For instance, running all of their errands at the same time instead of back and forth 8 times a day. Or carpooling. A gas guzzler sitting in someone's garage doesn't use any gas. That fuel efficient little 2009 Body Trap being driven hundreds of miles every week does.

We're supposed to believe this is a good thing for everyone, but when you really look at it closely, it's not.

[sandnsea]

9. That makes an awful lot of assumptions

You assume moms are going to quit taking their kids to soccer practice. That dad and mom aren't going to go to dinner an hour later. That they'll cancel their doctor appt at 10:00 just because it doesn't coincide with the hair cut at 1:30. They won't. And they won't car pool. And the gas guzzler won't sit in anybody's garage, except the poor who won't even be able to get to work anymore. This could have been given a little more thought, but it isn't as bad as you're making it out to be either.

[AndyA]

19. Buy into it if you want.

It would seem that you are the one making an awful lot of assumptions. I've seen people on my street change their habits to conserve fuel. If it's happening on my street, it's likely happening other places as well.

[blue_onyx]

12. Huh?

"Then the environmental damage when they force the engines to seize up"

What environmental damage is being done by forcing engines that use too much gas to seize up?


"A gas guzzler sitting in someone's garage doesn't use any gas."

Why would someone have a gas guzzler just sitting in the garage?


"We're supposed to believe this is a good thing for everyone, but when you really look at it closely, it's not."

It is a great program. It helps auto dealers, the auto companies, auto suppliers, consumers, and the environment by taking less efficient vehicles off the road.

[AndyA]

18. Huh? Back at you.

What environmental damage is being done by forcing engines that use too much gas to seize up?

When they seize up, they get super hot which burns off the oil residue that remains in the engines. Plus, engines create corrosive by-products when they combust, and these can create sludgy deposits that also burn off. All hazardous to the environment. Think blue smoke pouring out of the exhaust pipe, and floating down the street for a mile like a fog. That's what happens.

Why would someone have a gas guzzler just sitting in the garage?

Since they cost more to operate, people with these vehicles plan their trips better to save on fuel. They car pool. How do I know this? I have neighbors with SUVs in their garages that do it all the time, and have for a long time now. They need the SUV, need it to haul stuff in, and use them as little and as efficiently as possible. Saves gas that way.

It is a great program. It helps auto dealers, the auto companies, auto suppliers, consumers, and the environment by taking less efficient vehicles off the road.

Everyone except the poor, the middle class folks who don't have the credit to buy a new car, those who need the money to keep their house from being foreclosed on, and of course that blue smoke pouring out of all those seized up engines really isn't good for the environment, not at all. That's why car makers have been putting pollution equipment on cars for decades now.

[blue_onyx]

21. Like one of the other posts said....

you are making a lot of assumptions. You are assuming that the habits of your neighbors apply to all owners. How do you know people with SUVs plan trips better? How do you know people use their SUVs "as little and as efficiently as possible?" All assumption.

Do you have proof that the momentary emissions from a seizing engine is so massive that cancels out the benefit of taking thousands of gas guzzlers off the road?

I think you've decided it's a bad program and no information will change your mind.

[AndyA]

22. How do you know that people WON'T plan their trips better?

Driving in America is down overall, due to high gas prices, the economy, etc., and many believe Americans are finally tightening their belts a bit. Seems you're assuming a lot to say people aren't/won't change.

As for the environmental impact of destroying tens or hundreds of thousands of engines, Google is your friend. Yes, the environmental damage caused by trashing thousands of engines within a short period of time is severe.

I think you've decided it's a good program and nothing will change your mind.

See ya. :eyes:

[blue_onyx]

26. "Google is your friend."

So basically you have no clue about the actual effects of a seizing engine. I kind of figured you didn't know what you were talking about.

"How do you know that people WON'T plan their trips better?"

LOL. You're the one making that argument so the burden is on you to back it up.

[The Doctor.]

29. Uh... I didn't realize the program forced anyone to destroy 'perfectly good' vehicles.

There really are too many flaws in your argument to make it compelling.

Wanna see?

[insleeforprez]

23. Let's do some math

These calculations use some estimates, and may be inaccurate especially given that we're talking about *specific* cars.

That said, this is the relevant math behind the carbon effects of someone doing a Cash for Clunker deal TODAY:

Let T="how long the clunker would have been driven, in years, after today, had it not been traded in."
Let U="the average lifetime of a new car."
Let V="the carbon required to manufacture a new car."
Let M="the number of miles driven by the average person, per year."

Also, it's easier to use gallons per mile instead of miles per gallon. GPM = 1/(MPG)
Let G="the GPM of the old car minus the GPM of the new car" (i.e., the improvement)

This is the amount of gas you save by switching to the new fuel efficient car:
Gas saved=G*M*T

According to http://www.epa.gov/OMS/climate/420f05004.htm#step1 each gallon of gas used gives off 8.8kg of carbon.

So, we save 8.8*G*M*T kg of carbon.

What about the cost of manufacturing the new car? Let's assume that, once the clunker ran its course a few years down the road, the person would have bought a new car (seems reasonable) anyway. However, because of Cash for Clunkers, this car was bought earlier, so it'll meet its end sooner, and then she'll have to buy a new car again, etc etc. For simplicity, we can just amortize it, and only take into account the wear and tear it experiences under the program that it would not had Cash for Clunkers never existed.

This is T*V/U. Think of this as the per-year carbon cost of making the new car, multiplied by the number of years the Clunker would have been driven.

According to http://www.thenakedscientists.com/HTML/content/questions/question/2340/ a good estimate for V is 880*8.8=7744kg of carbon.

Putting this all together, the amount of carbon that you SAVE under Cash for Clunkers is,
8.8*G*M*T-(T*7744/U) or factoring out T, T*(8.8*G*M-7744/U). Note that T is irrelevant as to whether or not you save carbon.

If you're going from a 15MPG car to a 25MPG car, most reasonable estimates of M and U save carbon.

[robinlynne]

32. no. In ten years we will all be buying electric cars. This program is WONDERFUL!

It helped hasten the demise of the huge American car nightmare we have going on here. 250,00 off the road so far. fantastic! If we add some extra taxes on SUVS ad V8s maybe people will GET IT. Failes do not need sUVS. They think they do. There are families all over the world driving small cars happily. I carry lots of lighting and thought I eeded a big car, till I got a small car. guess what. We don't NEED big cars for urban living.

[The Doctor.]

38. I think I know who's having cocktails with me!

:toast:

I love your vision. It'll be nice when we see it come to pass while all the freeptards get tossed into the dustbin of history.

[robinlynne]

39. yum. I had a old cadillac until last year. I waited and waited for an affordable electric,

plug-in, which didn't happen, and I traded down to a honda. But when this honda dies, it is electric or bust! I only wish I had held out a year to be able to be in the cash for clunkers program. My 1991 cadillac fetched 275.00 at the junkyard a year ago....

[The Doctor.]

43. Owwie...

Though I gotta say... $275 ain't bad for salvage.

Sorry to break it to you; but the Honda ain't likely to die unless you beat the crap out of it.


As for Cadillacs; They have a very, very unfortunate lifespan on my property. I've never been able to explain it.

[robinlynne]

46. I did love it though. It was "who killed the electric car" that changed my mind.

The people in the film were there at the premiere and drove us around in electric cars.

[The Doctor.]

33. Rough for purposes of being succinct... but very well done.

I'm always impressed by a mind that can quantify and extrapolate so succinctly.

Thanks for doing some of the lifting the rest of us at cocktail hour wanted to avoid.

:toast: :beer: :toast:

[mkultra]

20. and you feel confident that the net effect of taking these off the road

Isn't actually better than running them one more time?

[HughMoran]

45. Most stupifying analysis ever

So because it's not perfect, we can't do anything at all.

Sounds like Republican philosophy to me.

[Spike89]

13. Not perfectly good cars with lots of life left

Geez, have you priced cars lately? Realize that if your trade-in is worth anything near $3500 (or $4500), then most likely the dealer is NOT going to want to run you through the CARS program, they'll want to offer you the trade-in value AND keep your car to resell and get more profit for themselves. Not to mention, that the incentive for the buyer isn't really an incentive if they can get that much anytime.

The truth is the majority of these cars being traded in because they aren't worth anything close to the $3,500 lower payment. I looked into it because I have a mid 1990s Mazda pickup that we rarely need. I can trade the thing in anytime for $3000. I'll wait and do it on my terms, not because the CARS program has problems, but because the $500 extra I might get isn't worth the restrictions the program imposes for me and I'd just as soon save move than the $500 by buying a late model version of what I want instead of new.

[scheming daemons]

15. And yet 250,000 cars sold via this program in ONE WEEK

It's an unqualified success.

[Spike89]

16. Exactly!

And the junk taken off the roads is a huge plus! Additionally, the program may even lower the cost of decent used cars for lower income people because the middle class may be buying new cars instead of late model cars. I just don't get all the criticism. This program isn't slicing bread, but it is doing much more good than harm.

[taught_me_patience]

25. It's called demand shifting

no net long term impact.

[scheming daemons]

30. Incorrect.....

- It infuses the auto companies with cash NOW, when they need it.

- The stimulative effect of the auto dealers making money is that the workers there have money to spend. This in turn is likely to get spent in other areas on other goods. This is what "stimulus" is. Customer spends money... employees at dealership make money... which they spend... which stimulates other businesses... and so on.

You need to read up on your Keynes.


- the environmental impact is DEFINITELY long-term

[taught_me_patience]

48. Economists are doubting it already.

http://finance.yahoo.com/news/Analysis-Clunker-cash-wont-apf-4281012286.html?x=0

Analysis: Clunker cash won't drive true recovery
Analysis: Think of clunker cash as an economic shot in the arm, not a long-term fix
By Jeannine Aversa, AP Economics Writer
On Wednesday August 5, 2009, 4:49 pm EDT
Buzz up! 36 Print.WASHINGTON (AP) -- The popular "cash-for-clunkers" program may be a well-timed shot of adrenaline for the economy, but it's not a prescription for a lasting recovery.

The federal rebates of up to $4,500 to drivers who trade in a gas guzzler for a more fuel-efficient vehicle are steering cash to car dealers, giving a boost to troubled automakers and generating much-needed sales taxes for cities.

All this will help the economy grow faster in the second half of the year than previously forecast. Yet the rebates will also steal economic growth from the future: They make car sales happen now that would have been made later anyway.

"Cash for clunkers," soon to be a $3 billion program after an expected extension from Congress, comes at a critical time for the economy. Recent data suggest the country is finally emerging from the worst recession since World War II.

[robinlynne]

34. huge net long term impact.

[taught_me_patience]

47. That's what the said about the "stimulus" tax cut last year

Sorry... the effect fades fast.

Analysis: Clunker cash won't drive true recovery
Analysis: Think of clunker cash as an economic shot in the arm, not a long-term fix
By Jeannine Aversa, AP Economics Writer
On Wednesday August 5, 2009, 4:49 pm EDT
Buzz up! 36 Print.WASHINGTON (AP) -- The popular "cash-for-clunkers" program may be a well-timed shot of adrenaline for the economy, but it's not a prescription for a lasting recovery.

The federal rebates of up to $4,500 to drivers who trade in a gas guzzler for a more fuel-efficient vehicle are steering cash to car dealers, giving a boost to troubled automakers and generating much-needed sales taxes for cities.

All this will help the economy grow faster in the second half of the year than previously forecast. Yet the rebates will also steal economic growth from the future: They make car sales happen now that would have been made later anyway.

"Cash for clunkers," soon to be a $3 billion program after an expected extension from Congress, comes at a critical time for the economy. Recent data suggest the country is finally emerging from the worst recession since World War II.


http://finance.yahoo.com/news/Analysis-Clunker-cash-wont-apf-4281012286.html?x=0

[robinlynne]

49. Of course. It is not meant to be a fix for the ecoomy. it is one tiny program..

[robinlynne]

50. And the long term gain is from downsizing cars, not economic. It would only be

a long term economic gain if it continued long term. then it would really boost the auto and auto aprts sector. As it is, it has given them a christmas in the middle of a recession. NOthing wrong with that.

[izzybeans]

17. delete

misunderstood.

[lame54]

24. It's how the housing problem should have been handled

[crickets]

27. Something similar to help keep people in their homes, yes. -nt

[robinlynne]

35. great idea!

[RB TexLa]

31. except for the debt most are required to take during a recession to use the program.

[mmonk]

36. That's precisely why I am for it. We need more stimulus of this kind.

Tax cuts isn't getting it done because if it did, we wouldn't have ended up where we are. Every $1.00 in tax rebates only returns $1.01.

[girl gone mad]

37. We're taking paid down cars and replacing them with..

debt-financed cars, in most cases. I don't think this is very good for the economy in the long run.

I don't think the program is as evil as many critics would claim, but it's far from ideal.

[scheming daemons]

40. It's stimulative. Krugman would approve.

[TexasObserver]

44. Recommend