Does the alleged “success” of the cash-for-clunkers program prove consumer confidence is on the rebound?
Cash-for-clunkers is the new handout program for car owners and car dealers. Bring in an old car with lower mileage than the latest models, and the government gives you $4,500 toward a new car.
It took about a nanosecond to dole out the first billion dollars. So Congress tossed another two billion into the pot.
Alan Greenspan, former Federal Reserve chairman, was at the controls when the Fed’s massive credit-for-clunky-mortgages program helped create the housing bubble. So he’s an expert. He’s been in the news lately saying that although he has his doubts about the clunkers program, its “success” shows renewed “confidence in the economy.”
Question: If the government simply threw bags of cash at people, and people stooped to pick up this cash, would this also prove “confidence in the economy”?
Observation: The clunker subsidies comes from somebody. Because the recipients didn’t directly drop by, directly put a gun to our heads, and directly compel us to write out a check for $4,500, we’re not supposed to notice. But if you had just been forced to turn over $4,500 to subsidize somebody’s new car, you’d probably say your household economy had just taken a hit.
Your confidence might even be shaken.
This is Common Sense. I’m Paul Jacob.
4 replies on “The “Confidence” to Accept a Free Lunch”
Finally somebody besides me sees it for what it is, MORE BAILOUT, with TAXPAYER money for AUTO COMPANIES. Will is ever cease?????
Well, the federal government is dead set on spending OUR money, and we aren’t going to stop them (until the next election). Yes, it’s our money, and we will pay it back in taxes.
This cash for clunkers program is the first I have seen yet that actually does something for the auto industry as a whole, and it gives the people with clunky cars a reason to go out and ‘stimulate’ the economy. That’s what all the experts say is what needs to be done. At least the program jacks up local sales tax income to the states and localities. My city is going bankrupt because lower sales tax revenue doesn’t cover the cost of their grandiose building plans.
The rest of the Congressional distributed pork stinks.
Jim Hornaday
What happens when somebody figures out that they can sell thier brand new car at a profit? Do you think anybody will buy new car for the 12 months? We have just doomed the auto industry for the next 12 to 18 months. Stock tip “short the Auto stocks”.
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