As featured on p. 218 of "Bloggers on the Bus," under the name "a MyDD blogger."

Monday, August 03, 2009

Wild Success Of Government Program Shows How Government Can't Run Anything

Amazingly enough, they're getting away with this message.

The government’s “cash for clunkers” program become the latest political flashpoint on Sunday, with Obama administration officials urging the Senate to approve more money for the initiative and Republicans raising concerns about it [...]

Republicans say the problems with the program are another strike against the Obama administration as it pushes for a speedy overhaul of the health care system that would involve a government-run insurance program. They argue that government involvement in any industry is a recipe for disaster.

Senator Jim DeMint, Republican of South Carolina, said the “cash for clunkers” program was an example of the “stupidity coming out of Washington right now.”

“The federal government went bankrupt in one week in the used-car business, and now they want to run our health care system,” Mr. DeMint said in an interview on “Fox News Sunday.” “This is crazy to try to rush this thing through again while they’re trying to rush through health care, and they want to get on to cap-and-trade electricity tax. We’ve got to slow this thing down.”

Let's number the "problems" with the program:

1) it's too successful and too many people want the rebate
2) the government Web site where the rebates get processed is getting killed because too many people are trying to access it
3) the rebates are going to "middle-class people" who may have eventually bought a car anyway
4) car dealers haven't gotten their rebate checks yet after a week

Are these even rational complaints? They boil down to "the program is too good a deal." I would agree, leveraging $5 billion dollars through the economy in a week is a pretty good deal for those on Main Street looking for some economic activity. There is a residual economic effect to selling a quarter of a million cars that increases hiring throughout the country as well.

While the program could stand with a few tweaks, and I stand with Sens. Feinstein and Collins on improving the fuel efficiency standards, the bottom line is that the program has a great economic multiplier effect, has been unexpectedly strong in increasing mileage rates among new buyers, and has been a boon to the middle class, which gets approximately nothing from their government 99% of the time. Republicans are going to carp at anything Democrats do, but what they are objecting to in this case is revealing. They don't like to see successful government programs that work.

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