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Saturday, August 1, 2009

Predictable: Cash-For-Clunkers Goes Bankrupt; House Races to Bailout Program; Schumer Wants More

As I reported back in June, the Cash-for-Clunkers is a disaster of an idea as the government ran out of money almost as soon as they started and became "nightmare now for everyone involved."

The House has already approved $2 Billion more to prop up this "clunker" of a government program. Apparently that isn't enough for the senator from New York, Chuck Schumer, isn't satisfied with that amount. He wants double:

Senator Charles Schumer, one of the original sponsors of the bill, said the program ran out of money because skin flints in the Senate wouldn't give him the $4 billion he wanted for the program, which gives people up to $4,500 toward buying fuel efficient cars to replace their old gas guzzlers.

He took it even further to mock those who didn't want to give him more of your money to begin with:

"There were people in the Senate who didn't like the program and they said 'We won't let it go through. We will filibuster. Try $1 billion and see if it works,'" Schumer said.

He said those senators now have egg on their face.

"This week's evidence shows that people who said the program wouldn't work, who said that the program was the wrong thing to do, are very wrong themselves," Schumer said.

I think we differ in our understanding of "works". If he defines it as people are bringing in the cars to sell their cars for up to about 7x as much as anyone would pay for it, if they would pay for it at all. Then, ya, it works. The fact that people would do sell their cars for much more than they're worth was never in doubt. I would do the same.

The way that I think most other people define "works" it doesn't even come close to working. Car dealers say that it is a mess. It's going to take billions of our money to get ALL of the "clunkers" off the road. That is money that we don't have in our proverbial pockets. We must to borrow it from China and he to pay interest on the loan. There is very little return on our investment. We are not going to be able to sell the cars that are being bought. Therefore, we are never going to get that $1B back. If the extra $2B expansion goes through, that money will not be seen again, either. Do we really want Chuck to have his way and up the ante up to $5 Billion total?

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