Cash For Clunkers Looks To Be Success
So the government inaugurated that cash for clunkers program this week. How's it going? Well...
The U.S. government will suspend the popular cash-for-clunkers program after less than four days in business, telling Congress that the plan would burn through its $950-million budget by midnight, several sources told the Free Press [...]
The decision to suspend the plan came after auto dealers warned the government today that it was in danger of losing track of how many trades had actually been made.
The plan offering owners of old cars and trucks $3,500 or $4,500 toward a new, more efficient vehicle has proven wildly popular, with 22,782 trades certified by federal officials since Monday. But the National Highway Traffic Safety Administration told dealers Wednesday that a vast majority of transactions submitted were being rejected for incomplete or illegible paperwork.
A survey of 2,000 dealers by the National Automobile Dealers Association, the results of which were obtained by the Free Press, found about 25,000 deals not yet approved by NHTSA, or about 13 trades per store. With 23,005 dealers asking to be part of the program, auto dealers may have already arranged the sale of more than the 250,000 vehicles that federal officials expected the plan to generate.
OK, so some problems with implementation. But in general, you're talking about a wildly popular program. I think that the speed of the deals shocked those carrying out the rebates, but I expect that to get ironed out soon enough. And you're basically talking about $1 billion dollars leveraging about $4-$5 billion dollars through the economy within four days and saving an unspecified amount of oil through the sale of almost a quarter of a million more fuel-efficient cars. The fuel efficiency standards could have been higher, no doubt, but taking out a quarter of a million crappy gas guzzlers is great, and $5 billion in economic activity where none would otherwise exist is an excellent mini-stimulus.
I also like DiFi's stand, after Michigan lawmakers vowed to seek additional funds for the program, that she would block anything unless the fuel economy gains were boosted. The taste has been offered to Detroit, and now they'd be hard pressed to say no.
Now, let's offer money to people to paint their roofs white.