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'Cash for Clunkers' Killed Jobs, Hurt the Environment

When President Obama came to office, he promised that government would solve all kinds of problems. The economy would boom, war would end, and the scourge of crabgrass would never again despoil suburban lawns.

Progressive believers never doubted that Washington could merely snap its fingers and the infinitely complex global economy would snap to attention. Even the ocean levels would obey President Canute.

However, as Thomas Sowell famously said, “there are no solutions... only trade-offs.” Like a half-filled balloon, if a politician squeezes one side, the other side pops out.

One of Obama’s first initiatives was the “Cash for Clunkers” program. While those saddled with common sense ridiculed its naiveté, big-government devotees were sure the scheme would create jobs and heal the planet in one fell swoop.

The results are in and the skeptics were right.

“Cash for Clunkers” allowed drivers to trade their old gas-guzzler for up to $4,500 towards the purchase of a sparkly new green machine. Progressive pundits hailed it as a foolproof win/win/win: The anemic auto industry would sell cars, broke customers would get a sweet deal, and Gaia herself would breathe easier at America’s crystal-clear skies.

Alas, reality begged to differ:

[Cash for Clunkers] created a dearth of used cars, artificially driving up prices. For those who needed an affordable car, but didn’t qualify for the program, this increase in price meant affordable transportation was well out of reach. It also meant used-car dealers, most of whom are independently owned, small-business owners, had little to no stock. According to Smith, 122 Virginia dealers chose not to renew their licenses after that year.

If 122 dealers were put out of business in one state alone, just imagine the damage nationally. And help to the consumer was illusory. The artificial trade-in bonus helped people who couldn’t qualify for a new car loan get saddled with debt they had no hope of repaying. Once financial reality — and higher insurance rates — kicked in, many saw their cars repossessed and their credit ruined. Ultimately, they traded in their affordable ride for a daily bus ticket.

At least more people riding public transportation helped the environment, right? If you dare to have your faith in politicians rattled further, read on.

E - The Environmental Magazine gravely notes that Cash for Clunkers produced tons of unnecessary waste while doing almost nothing to curb greenhouse gas emissions.

Shredding vehicles results in its own environmental nightmare. For each ton of metal produced by a shredding facility, roughly 500 pounds of “shredding residue” is also produced, which includes polyurethane foams, metal oxides, glass and dirt. All totaled, about 4.5 million tons of that residue is already produced on average every year. Where does it go? Right into a landfill.

E Magazine states recycling just the plastic and metal alone from the CARS scraps would have saved 24 million barrels of oil. While some of the “Clunkers” were truly old, many of the almost 700,000 cars were still in perfectly good condition. In fact, many that qualified for the program were relatively “young,” with fuel efficiencies that rivaled newer cars.

Despite Washington’s lofty promises to consumers, car manufacturers and environmentalists, “Cash for Clunkers” was a lose/lose/lose. And you can add another “lose” for the taxpayers who funded this foolish scheme.

Follow me on Twitter at @ExJon.

David Larsen

Danny, first the government doesn't have the right to pick winners and losers i.e. car manufacturers, used car dealers. Economics is supply and demand and all runs in a circle one feeding the other. This is like teeth in a gear. Some idiot i.e. government jumps in takes the used car dealers money i.e. tax money to destroy his business and knock a few teeth out of the gear. This then knocks out a few more because it is not running smoothly and finally the whole gear fails i.e. economy. Economies are delicate and take time to reach a balance. Employment is the gear. What right minded law abiding person wants government to take his money and use it to destroy him with it. There are fringes in all business i.e. poorly run but this does not lessen their rights. When you try to concentrate businesses using government you are talking socialism which turns into communism. Your theory of poorly run could be extended to your brain and therefore the same could happen at a person level. Many countries judge poorly run based on their own perspective i.e. own benefit and rid all in their way.

Jon Hawk

Hey Danny, seems you have NO facts to back up your statement...maybe YOU need to your research and get YOUR facts straight, obviously you have no clue as to what you are talking about....

Warren Potter

So Danny. The writer of the article stated in the article where he got his facts. Yet you call him a liar and quote facts of your own. Care to share with us where your facts came from? Or were they dreamed up in your head like most lefty "facts"

slwoodward's picture
Scotty Woodward

Lol. I love it when a liberal scheme is exposed for what it truly is - a scheme!

Connie Plourde

Hey Danny, you wouldn't mind showing us your source of information would you? In regards to Bush's stimulating the economy with rebates, isn't that the same pile of dung Obama keeps selling to liberals. Take from the rich, give to the poor and all is right with the world. LOL

Danny Rodrigues

One other thing you don't see here, is the amount of cars purchased using the $4500 credit vs the amount of used cars sold in that same time period.

Nah you wont see that because this is more Republican propaganda with created facts to suit there cause... unfrickinbelievable...

Danny Rodrigues

The author of that article should research his "facts" 90% of those dealers who went out of business were poorly run fly by night establishments. Basically going out of business because (and this is what people still forget), the Texas village idiot sat back at his ranch and watched pretty much every facet of this countries economy go down the tubes. The argument he is making is ABSOLUTELY ridiculous. Let me get this straight. Because of a $4500 credit, people could afford to go out and by $20-$40k cars? Instead of just buying $5-10k used cars? $4500 was enticing enough to destroy the used car business? This is almost as absurd as Bush handing out $600 rebate checks from a surplus and the Republicans stating it would stimulate the economy... I swear to God, people believe some stupid shit... Economics doesn't work like that... The article is a total fucking joke...