Obama's cash for clunkers program is a real clunker

 

NSBNEWS.net photos by Henry Frederick. Peter Mallory enjoys his clunker, a 2001 Mercury Marquis, complete with faded bumper stickers of two of his favorite conservatives -- Jeb Bush and Tom Feeney.

It had duct tape on the rear left fender before I broke down and spent $106.50 for bondo, but I wouldn't trade my clunker in for all the tea in China. That's because the Obama clunker program is a real clunker, something that is just costing the taxpayers even more to bail out the automakers and their unions.

I'll keep my 2001 Mercury Marquis. It only has 90,000 miles and runs great. Besides, I can't remove my favorite bumper stickers (Tom Feeney and Jeb Bush)  to put on a new car.

It would be interesting to know how many Americans realize what an economic fiasco the cash for clunkers program represents.

Rene Faulkner, 50, at Mom’s restaurant, likes the clunker program, saying it will "help the economy," but added she doesn't like that the old cars are destroyed in the trade-in.

The dirty little secret is that there is no way this program can help the economy as a whole. People should ask the question: “How can paying people to destroy tens of thousands of serviceable cars possibly help the economy?”

If this type of action would help the economy, why don’t we pay people to burn down their old houses. In fact, ask the question:” Why didn’t we evacuate New York and then bomb it instead of Berlin or Tokyo? “

The idea that you can help an economy by destroying something and then paying someone to replace it is an old one.

If you look only at the economic activity of those people who are employed in replacing that which is destroyed, then you can con yourself into believing that the destruction was a positive thing.

However, if you look at the initial destruction and take account of the expenses to those who must replace that which was destroyed you cone up with the conclusion that the net economic effect is the loss of that which was destroyed.

Returning to the cash for clunkers, you can look at the happy faces of the people turning out the replacement cars and those who are getting a subsidized car and reach the erroneous conclusion that it is helping the economy.

However, if you look at the whole situation you have unhappy taxpayers who are footing the bill. You have people who have blown their budget by upgrading to a car they cant afford and probably don’t need as much as some other things such as rent money.

You have people who now have car payments who didn’t have them before and merchants who are selling less because their clients are using the money to feed their egos with a bigger car.

You also have the fact that the cost of used cars goes up as the clunkers are destroyed. This hurts the people at the lower end of the economic chain the most..

When you analyze the situation, you find that there is a net loss to the economic system of the destroyed cars and the distortion of priorities as people have made economic decisions they would not have done with their own money.

For those people who think they are saving the planet with this program I am at a loss for words.  I plan to keep my clunker for as long as it provides reliable transportation.


Peter Mallory's clunker as shown from the front with colleague Henry Frederick's sexy white 2002 Audi TT convertible turbo parked behind.

Peter Mallory Picture

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The Right Side By Peter Mallory
Peter Mallory of New Smyrna Beach is retired as co-publisher of NSBNews.net, but he continues as an award-winning blogger for the 24/7 Internet newspaper he helped Editor/Publisher Henry Frederick establish in 2008. He was recognized as a top blogger with NSBNews.net in 2011 by the Florida Press Club.

Peter Mallory of NSBNews.net Named award Winning Blogger

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