Well, it looks like it's official (see here), the Senate has now approved an extension of the Cash for Clunkers bill. The bill was either a huge success or a huge expenditure depending on your point of view. It's a redistribution of wealth from the taxpayers (only 50% of Americans) to those who are in a position to buy a car. Or maybe it's another bailout for car manufacturers.
Some interesting information has come out about the program and actually a lot of details have not come out. But so far, it looks like GM has been the biggest winner with 18.7 percent of new sales. Ford has actually seen a profit. From my previous post, I showed how the increase in sales was short lived, so I hope Ford is investing the profit wisely - it won't last.
Another report I saw said that Ford Explorers were the most traded in vehicle along with older mini-vans. My suspicion is that these owners had been waiting to get rid of their "clunkers".
Remember the program had a dual purpose: #1 to help the auto industry and #2 to increase fuel efficiency. If the Ford Explorers and mini-vans were actually being used and the new cars are taking their place, the second goal will have been reached. I suspect the less fuel efficient cars weren't in heavy use and the newer efficient cars will be used by new drivers, thereby increasing overall fuel usage. (I considered selling a clunker and getting my wife a new car, but I didn't qualify).
Details of the clunker program have been hard to find. The AP reports that the "Obama administration is refusing to release government records on its "cash-for-clunkers" rebate program that would substantiate — or undercut — White House claims of the program's success." So despite promises of "transparency in the people’s White House," things seem to be mostly cloudy. I guess like the stimulus plan, we don't have time to be forthcoming, we have to act now.
My main concern though is the change in the program. The program was initially approved (after a lot of discussion) for $1BILLION or until November 1, which ever came first. We've reached the $1BILLION mark, so the program should be ended. The expansion is going on without any real analysis. Everyone's having a good time, so we just go on spending.
Some of my kids have learned (the hard way) that only the Federal Government can continue spending when they run out of money. In this case, the government doesn't even know how much it has. It's like ignoring the balance column in the checkbook register (do people still use those?)
The new bill should have gone the way of the clunkers -- into the shredder. What do you think?