In another story, the Associated Press is reporting that the call to increase funding for the program is being heavily supported by industry leaders:
The Senate came under increasing pressure Monday to refuel the stalling "cash-for-clunkers" initiative amid uncertainty over how much money, if any, is left in the fund bankrolling the popular program.In my humble opinion, the program makes sense. It gives the economy a jolt while, at the same time, increasing fuel efficiency overall in the U.S. Who can be opposed to it?
The Obama administration pushed for an additional $2 billion after serving notice over the weekend that the program could expire as early as this week unless the Senate acts, as the House did in voting overwhelmingly for the money last Friday.
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Fierce lobbying for keeping the program running came from several quarters. The National Automobile Dealers Association and the American International Automobile Dealers said they were contacting thousands of dealerships and encouraging them to bombard the Senate with phone calls and e-mails.
"This is the one true stimulus that seems to be working out of all the things that have been tried in the last few months," said Cody Lusk, president of the international dealer association.
But as usual these days, the Party of Herbert Hoover wants to "Just Say No" to more funding. The New York Times quotes Senator Jim DeMint of South Carolina (who also opposes health care reform) as saying:
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.”
At the same time, Senator John McCain has announced that he will lead a filibuster against the funding increase.
Will the Republicans come to their senses and admit this part of the stimulus is working? Or are they bound and determined to be DeMinted? Stay tuned.
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13 comments:
Jim since my older car came from the factory with an two-mile MPG average higher than the Cash-for-Clunkers limit would you just cut me a check so I can buy a new car too? How about $2500 since my old ride is already a wee bit more fuel efficient?
And if it isn't asking too much would you pay my mortgage this month?
Thanks.
I think there is a frightening amount of short-sightedness being thrown about when it comes to the economy, and I think a lot of that short-sightedness can be demonstrated when anyone claims, barely a month in, that a particular economic stimulus measure is working. It took years to ruin the economy and the further ruination that will follow years from now will trace its roots to, well, now.
Jim, as someone who often advocates for the poor, I would hope that you would agree that our economy's obsession with crippling debt only worsens the plight of the poor. Measures like Cash-for-Clunkers only work to stimulate the economy in the short term if they induce people to take on more debt. That's how it's working, inducing people to buy new cars that they almost certainly cannot afford, and going into debt to do so.
Before declaring victory, I'd prefer to wait and see how many car dealerships replace their C4C banners with repossession sale banners when people learn the hard way that they cannot afford a new car, and that's why they were driving a clunker in the first place.
The homebuyer's credit is similar. The housing market is in bad shape because people cannot currently afford to buy homes. A nominal tax credit doesn't change that fact, it merely lulls the populace into a false sense of security. Things like this have a way of coming full circle and the most basic lessons never seem to be learned, no matter how obvious they are. Meanwhile, the poor get poorer and the rich get richer, world without end...
Jim is likely one of those guys who believes that V-shaped "recoveries" are some kind of norm.
One helluva debt burden you're passing off to your daughter Jim. We'll probably need to invade and annex northern Mexico to get enough net incremental workers to merely break even annually.
Toodles.
Anonymous@1 pm: We don't need to invade Mexico. The workers will come to us. Immigrants add wealth to an economy, and ours is no exception. I'm not against giving Texas back to Mexico, either, but that's a post for another day.
Oh, and thanks for the thoughtfulness about my daughter. But since I've incurred a pretty heavy debt burden myself to pay her way through college, I don't mind passing on a little happiness to her as well.
Christopher, I appreciate your thinking, as always. But I don't think C4C will suffer the same fate as the housing boom. The government contribution is on the front end, reducing the overall price. The finance companies will have to do their own due diligence as to whether a potential purchaser can afford to borrow to pay the reduced price.
Not to leave you out, Anon@12:05. In addition to repaying the aforementioned daughter's college debt, I also pay a pretty sizable chunk to to her former stepmother, as well. That last is my own personal C4C program, so to speak.
No wonder you want to redistribute other people's hard earned money. Misery loves company.
Just more evidence you have no clue what you are talking about.
Just to clarify, my comment above about people not learning obvious lessons was in reference to the beneficiaries (aka: victims) of government programs who get themselves into a bad situation, get bailed out by Uncle Sam, then view the situation as ripe for getting back into trouble. This type of mindset is demonstrated whenever someone finally pays off a credit card after (of course) paying a great deal more than the vale in the form of interest, only to max out that line of credit again on something else they can't afford.
I feel like America has gotten a very good object lesson recently about what happens when you pile debt on top of debt on top of debt. Then the government comes along with a solution: more debt! During a time when people are cutting back on non-essentials, here come our elected officials, trying to get us to buy things they know we can't afford in order to kickstart these big businesses. And this from a Democratic White House and Congress. When did the Democrats start sacrificing the poor on the altars of big business? What is going on?
And you know what? These people will get new cars but they still won't change the oil, keep their tires inflated, change their filters and otherwise maintain their new vehicles properly in order to wring the maximum possible fuel mileage out of each tank of gas.
Jim, can I come by and pick up that check? I want to trade my old Buick in for an Escalade. With the money you're giving me and the 120-month financing I can make the payments. Insurance may be a stretch but I'll drop it after I close the loan.
Thanks for all your help.
Ispe - Just keep on publishing information and reports; ignore the nut cases, they're here to stay; it's how "the Limbaughs" stay in business; when no one will listen to their incoherent rant anymore, they resort to ad hominem. (Uh, on second thought, I guess I should clarify for some of the anons posting here . . . that "ad hominem" is NOT a corn by-product).
Where will it end? Next up; Cash for Junkers, home version. If your house can't pass inspection due to roof, foundation etc, (like mine) help a sister out and gimme like 45k toward a new home. Problem solved. It's not like people living too high on the hog is part of what got us here anyway.
I'll admit, the C4C has stimulated the hurting car industry thank God. But if someone is still driving around a '99, what makes us think they can tote the note on a shiny new 2010. Yeah it's the lending houses to make that call, but they actually have apps coming through their faxes for the first time in ages. Do you think they're really being that picky? Nope. Long term will tell us if this is a feather in Obama's cap yet or not.
Hey Jim, what are you going to say when the deficit spending to finance this so-called stimulus jacks up 10 year yields to 7 or 8 percent and wrecks any recovery?
What about the poor suckers borrowing money to finance these clunker-based purchases? That is a damn crime. Car debt is irresponsible and dangerous, and it is morally wrong for the government to encourage it.
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