The car guys weigh in on Cash for Clunkers

Cnn reports here that the car people at Edmunds have weighed in on the Cash for Clunkers program. It's not pretty. Excerpts from CNN follow:

"A total of 690,000 new vehicles were sold under the Cash for Clunkers program last summer, but only 125,000 of those were vehicles that would not have been sold anyway, according to an analysis released Wednesday by the automotive Web site Edmunds.com ...

The Cash for Clunkers program gave car buyers rebates of up to $4,500 if they traded in less fuel-efficient vehicles for new vehicles that met certain fuel economy requirements. A total of $3 billion was allotted for those rebates.

The average rebate was $4,000. But the overwhelming majority of sales would have taken place anyway at some time in the last half of 2009, according to Edmunds.com. That means the government ended up spending about $24,000 each for those 125,000 additional vehicle sales.

"It is unfortunate that Edmunds.com has had nothing but negative things to say about a wildly successful program that sold nearly 250,000 cars in its first four days alone," said Bill Adams, spokesman for the Department of Transportation... "

No doubt Mr. Adams characterizes the plan to give away money as "wildly successful" but the people who funded this program might have found higher and better uses for their monies, such as saving for their children's college educations, saving for their retirements, or perhaps helping with their parents' eldercare expenses... or buying their kids or themselves a computer or a washing machine.  But the freedom to make those choices, to exercize their judgement in the best interests of their families was taken from them by this arbitrary government policy.

Those who are disappointed can still find your money...it's just that someone else is driving it.

As to the practical outcome of $24,000 per incremental car sold, how about this cost saving idea for next time?

• buy 125,000 cars for $18,000 instead of $24,000;
• give away the cars;
• take $5,000 per car out back and burn it;
• thereby selling the same number of cars but saving $1,000 per car!

Better get used to it.  Now where is the US $ trading again?

Just wait for healthcare.