Let me get this straight. Our Beloved Government set aside $1 billion dollars of TAXPAYERS money to "give" to people who want to trade in an old car for a new one. Did they mention it is considered a government subsidy; therefore to be considered as income and THEREFORE TAXABLE???? So much for free programs, huh? Why didn't we find this out until late?
So what happened to that $1 billion dollars? Well, when the they got the green light for the program, they initially halted it 5 days in! Why? Too popular, they say. So what do they do? they BORROW another $2 billion- from other government programs, supposedly- to EXTEND the program!! In the legislation, it clearly stated that the program is to run until November 30, 2009 OR UNTIL the funds of the program had been used." Why extend it? Think of the DTV transition and after 2 years of warning, people were still "not ready for it."
So, even in a vacuum, instead of one mismanaged program, we have 2!! Great!!! And yet they called it an alarming success even though we overshot the runway by 200%! But let us be realistic: the money the Imperial Congress borrowed came out of YOUR pocket!
Now, do we know where this was originally started? Was this brought into existence but our Legislators? NO! Our Communist Apologist Van Jones- our Green Czar- that brought this about. On April 30, 2008, the blogsite greenforall.org shared a video about this with us. This initiative was partially funded by ShoreBank, a community bank in Virginia and Maryland. But what was his motive? Does he really want to "Green Up," the environment, or give a job to "Pooky," as he talks about in a discussion about his position? Or does he want to try to overload the system until the crack from under the surface of this government?
So what did CARS accomplish anyway? Let's look. If everyone who traded in a car qualified for the full $4500 "gift (buying a car that has a total mileage of at least 10 mph GREATER than the trade in)," that would mean only 222,222 people would have been allowed to partake in this (this is the figure for the $1 billion price tag). All in all, over 750,000 people participated in this. It's not bad on the surface, I admit it. But here is where it goes awry.
Tell you what, consider this: I drive a 2004 2WD Chevy Blazer which needs about $3000 of work. My mother drives a 2004 Jeep Liberty which she has kept immaculate. My father drives a 1996 Volvo 960 which has seen much better years. Who doesn't qualify for CARS rebate? The answer: Dad! Yep, his car gets a sultry 19 miles to the gallon, where mom and I get 17 and 18 respectively. What does that accomplish? Furthermore, if Mom traded in her car for a new one, under the legislation for CARS, she COULD NOT give that Liberty to Dad. No, her car must be crushed and "recycled." So Dad can't take the car 8 year his trade-in's junior, and give up his Volvo.
Now, multiply this by 750,000 times. What do you get? As Chris Edwards from the CATO Institute wrote: "a short term 'sugar high.'" If we assume that each "clunker" is worth $3000 each, the government destroyed $2.2 billion in assets! Do the math. Moreover, this cripples the used car sales business because there are up to 750,000 LESS used cars to sell. This also hurts the lower income families who cant afford a new car for the same reason. Plus, it makes the used cars already on the lot MORE EXPENSIVE! (Economics 101: Supply and Demand) Be reminded: We are still in a recession! What do you not need in a recession? Higher Taxes and Higher Prices. Poorer people cannot buy the things they need. This only prolongs a recession!! Also, think of this: a lower income person, with no car payment, comes into a dealer and gets a CARS rebate on a new car. Now they DO have a car payment on their limited income! What happens when they cant afford it anymore? How does this help? Are your wheels turning yet??
And for those that wanted to scrap the hooptie for parts, FORGET IT! You could not take an good transmission or whatever from your "clunker" and use it in a different car to fix it. Nothing can be used once traded in. These cars are crushed, disabled and rendered useless. Your once rolling jalopy is now a cube of twisted metal trash. Well done, Government Twits!
There was a rumor of a loophole where a dealer could choose not to have a car demolished, but I have not found it in the legislation itself. Sorry, I don't speak Legalese!
Then we have the bureaucratic part of it all. Uncle Sam hired 1100 more people to help work with the paperwork in Washington, the ONLY place in the US where unemployment is SHRINKING!! So that is more of MY money that they are using and I get no benefit! The paperwork itself was no picnic either. Average purchases under this program took 5 HOURS to complete, due to the speed and constraint of the government computers (after all, they do not use NEW IMAC'S, you know)! The forms the dealer had to fill out were 9 pages PER PURCHASE. If there was an error, you could not go back and fix it, you had to start over! Do we see where the money is going yet? How much Red Tape is in this... and other government programs?? I am not blaming just Democrats this time, BOTH parties agreed on this. Both are at fault. Both deserve vilification! Did anyone try to stop this?
On a local level, I know of 2 dealerships in the Atlanta Metro area that, as of Friday, August 21, 2009, have sold close to 600 cars under the "clunker" program. The money "borrowed" for this program was supposed to go to the dealers as a kickback for the lost revenue, with about $150 million for administrative purposes. Together, these two dealers are owed about $1.8 million and have received less that $10,000 for this rebate program!! What a farce! Many of their transactions are still in the system as "pending" or "declined (with no reason, mind you)."
Some claims, sadly, are lost in the system. With thousands of dealers grasping for this government money, it is likely these 2 dealers will not get everything they worked for. How does it help the economy of small and mid-sized business when these companies may have to lay people off of work because they are "still waiting on lost revenues from the government rebate." Where is the money that Congress borrowed FROM US and why is it taking so long to get to these dealers. Small businesses cannot survive with a $1 million budget cut to their operations. I am shocked that more dealers did not fold.
The one funny part... well, it's funny to me... is that some of the more popular cars bought on the CARS program were SUV's! Yes, the Priuses and other Hybrids did get their due attention, but so did cars like the Lincoln MKX and the Chevy Equinox. Even HUMMER got a few sales out of it! Go figure.
Earlier in the program, there were reports of the dealer having to give ALL of its computer information, private and commercial, to the government so that it may "monitor purchases and transactions." This includes, dealer info, VIN numbers, and the BUYERS' personal info. The government now has YOUR credit info, bank info, social security info... all because you wanted a new car and you wanted the government to pay for part of it! Is it worth giving up your civil liberty and privacy? Not mine.
Some dealers decided to cut the program early; some never participated. I applaud them all who took this action. But, I am afraid that too many didn't do the same. And for that, we may see 750,000 less cars (possibly FAR less) being sold within the next 2 years because of this program.
Follow the money trail one more time. 750,000 cars means that the average rebate was $4000. This means that only half qualified with a 10+ MPG trade in. If we extrapolate that data, we can then figure that, all in all, the average consumer gained about 5 MPG from the purchase. Plug that in to my car. I go from 17 to 22 MPG. I have a 16 gallon tank. This means I gained 80 miles per tank. Less than 4 gallons per fill up- $10 per fill up (at $2.50 per gallon). If I filled up 50 times a year, I would save $500 annually. If this analogy worked for all involved in the CARS program, we save $375 million a year on gas as a nation! I guess that is the "Green" part of the program.
So I ask you, was it worth $3 billion to save $375 million? That is about than 12% return AT BEST at face value. It will take 8 years to make up THIS DEFICIT ALONE! No business can survive on that. Our Country cannot survive on that. Be reminded, Cap and Trade is still lingering on the horizon and our energy prices will "necessarily skyrocket," Obama says. These figures will surely change as well.
...and these clowns wanna run our Health Care too???