Who Is Hurt By Cash For Clunkers?
Normally I don't get political on this blog but the more I think about this Cash For Clunkers program amid all the other government welfare and spending the more it ticks me off the unintended consequences. At first blush Cash For Clunkers seems like a great way to stimulate the economy and improve the gas milage of our vehicles. But think of what happens to that "clunker" when it's turned in and how many people are dependant on that vehicle being driven. So with that in mind here's my list of people who are negatively affected with each car turned in under the Cash For Clunkers Program.
1: Charities - Many times cars that will be turned in under Cash For Clunkers would be donated to charity. Now because the government has stepped in offering a handout this car will simply be crushed.
2: Fire Departments - Many carss that would otherwise be donated to your local Fire Department for training will now be turned in and scrapped.
3: Auto mechanics - Your smaller mom and pop type auto repair shops exist because people drive cars worth less than $4500.00 these cars need inexpensive repairs and independant auto mechanics exist because folks take their cars to them. Under Cash For Clunkers these cars will again be scrapped taking business from the small business that needs it the most.
4: Buyers - Most of these buyers turning in their clunker had the car paid off. Most should not be buying anything new due to the economy. However most of the buyers of new cars through Cash For Clunkers will finance the vehicle or worse lease the vehicle bringing a ball and chain of payments, risk and lost cash flow into their life. Another aspect of this is depreciation. Smart car buyers buy used vehicles 1 or two years old. Buyers under Cash For Clunkers will likley take on payments they can't afford and will instantly lose 50% of their $4500 savings in depreciation cost.
So when you get excited about government programs that "stimulate" the economy. Condider the other half of the coin. When they give money to one person they ultimately take it away from another.
1: Charities - Many times cars that will be turned in under Cash For Clunkers would be donated to charity. Now because the government has stepped in offering a handout this car will simply be crushed.
2: Fire Departments - Many carss that would otherwise be donated to your local Fire Department for training will now be turned in and scrapped.
3: Auto mechanics - Your smaller mom and pop type auto repair shops exist because people drive cars worth less than $4500.00 these cars need inexpensive repairs and independant auto mechanics exist because folks take their cars to them. Under Cash For Clunkers these cars will again be scrapped taking business from the small business that needs it the most.
4: Buyers - Most of these buyers turning in their clunker had the car paid off. Most should not be buying anything new due to the economy. However most of the buyers of new cars through Cash For Clunkers will finance the vehicle or worse lease the vehicle bringing a ball and chain of payments, risk and lost cash flow into their life. Another aspect of this is depreciation. Smart car buyers buy used vehicles 1 or two years old. Buyers under Cash For Clunkers will likley take on payments they can't afford and will instantly lose 50% of their $4500 savings in depreciation cost.
So when you get excited about government programs that "stimulate" the economy. Condider the other half of the coin. When they give money to one person they ultimately take it away from another.
posted by beer234 at
10:33 AM
