Favorite Segway thing . . .

[KSagal]

Originally Posted by Bob.Kerns

Buying cars doesn't feel so nice -- but just so you can feel a bit better:

• At least you won't have to breath their exhaust.
• At least that's money that won't be going to hostile nations.
• At least those low-mileage clunkers won't be helping drive up the price of gas.
• At least that's less tax money you'll be paying in unemployment.
• At least somebody got a new car out of the deal. Vs. no new car for unemployment.

Note: I'm not really supporting the plan. I'd go about it differently. But at least if it is costing you, say $100 in taxes, you aren't all of $100 in the hole if you look at the big picture.

I think "clunker defaults" will be relatively low, because of the tightening of the credit markets. After all, that did help precipitate the crisis.

How would I go about it? Well, if you're going to do it, fund it with a tax on clunkers. Much more economically efficient. You get a bigger economic incentive for a given amount of wealth transfer, and the cost is born by those imposing the societal cost of the clunker.

Let's talk about your points...

Exhaust? Okay, a couple miles per gallon is better.

Money not going to hostile nations? I presume you mean via oil imports, because (depending on who you ask) 75% or more of the welfare checks given in this program went to cars from foreign nameplates.

Driving up the price of gas? Hard to be sure. They will surely be driving up the cost of used cars, and since other programs like this around the world have resulted in black market cars to 3rd world locations, I don't know what other economic impact that may have. I still believe that oil futures and speculators, and a robust economy have much more to do with the price of gas than this program will ever have... Even with another 2 billion dollars, what do you guess will be the impact on the average miles per gallon for the cars driven in the US? I suspect it will be minuscule to the consumption of gas in the US.

Savings via Unemployment rolls? Again, since the cars sold are not all US, then many of the autoworkers that will benefit with the work to make cars will not be in the US and therefore will not affect our unemployment roles... Some will, so to a degree, this will help. But it will also impact the taxes and the credit markets as the Feds wrestle with the giant and growing deficit, and how to service that incredible debt... Because of the irresponsible spending, the net results of a stifled economy by an overspending and overtaxing federal government will cost far more jobs than the jobs saved by this welfare program.

Someone got a new car? Yes, someone who has a job (so they can get credit) will get a car with me paying a part of the cost... That may be good for them, but bad for me. My family benefits from my efforts, and now another family will too... My first responsibility is to my family.

$100 in the hole is not really a $100 in the hole... No, here we agree. I will be far more than $100 in the hole, as the feds typically waste at least 30% of all that they touch, by even the most generous gauges... So, in order to make me $100 in the hole, but the feds design, they will take at least $130. Then, the degradation of my remaining dollars will be that much more severe because of the devaluation of the US dollar as the rest of the world realizes how much is being wasted and thrown away, and given away, and much of it going out of our own country anyway... So, here I agree, the $100 in extra taxes that I cannot afford to pay will indeed be far different that actually $100 missing, much more in fact...

I would do it simpler. I would let failing companies fail. Some people will loose and it will be difficult, but all that is happening is that the agony will be drawn out longer, and unless we have a world war to pull us out of this one, we will be in for decades of bad economy, unless we actually learn that you cannot spend your way out of being over extended, as we are now... During the great depression, they spent and it lasted longer than it would have otherwise, in my opinion. Certainly what has been done is not yet working...

Regardless of success or failure, good economy or bad, those who have a ventured interest in revision history will continue to do so... If it gets better, they will take credit, and if it gets worse, they will continue to blame anything but themselves... Such is life.