Cash For Clunkers is a Modern-Day Version of the Broken Window Fallacy

Cash For Clunkers is an economically unsound program that will only make the American economic situation worse.  It transfers wealth from one group of people to another while simultaneously destroying real wealth and misallocating scarce capital away from its best use.

To understand why this is, you need only understand the Broken Window Fallacy.

Frederic Bastiat originally formulated the Broken Window Fallacy in his landmark book That Which is Seen and That Which is Not Seen.  Henry Hazlitt then expounded and reformulated it for a more modern audience in his classic work, Economics in One Lesson (which was one of our 31 top resources for small business owners and employees).  In Chapter 2, entitled “The Broken Window,” Hazlitt wrote:

A young hoodlum, say, heaves a brick through the window of a baker’s shop.  The shopkeeper runs out furious, but the boy is gone.  A crowd gathers, and begins to stare with quiet satisfaction at the gaping hole in the window and the shattered glass over the bread and pies.  After a while the crowd feels the need for philosophic reflection.  And several of its members are almost certain to remind each other or the baker that, after all, the misfortune has its bright side.  It will make business for some glazier. As they begin to think of this they elaborate upon it.  How much does a new plate glass window cost?  Two hundred and fifty dollars?  That will be quite a sun.  After all, if windows were never broken, what would happen to the glass business?  Then, of course, the thing is endless.  The glazier will have $250 more to spend with other merchants, and these in turn will have $250 more to spend with still other merchants, and so ad infinitum.  The smashed window will go on providing money and employment in ever-widening circles.  The logical conclusion from all this would be, if the crowd drew it, that the little hoodlum who threw the brick, far from being a public menace, was a public benefactor.

Now let us take another look.   The crowd is at least right in its first conclusion.  This little act of vandalism will in the first instance mean more business for some glazier.  The glazier will be no more unhappy to learn of the incident than an undertaker to learn of a death.  But the shopkeeper will be out $250 that he was planning to spend for a new suit.  Because he has had to replace the window, he will have to go without the suit (or some equivalent need or luxury).  Instead of having a window and $250 he now has merely a window.  Or, as he was planning to buy the suit that very afternoon, instead of having both a window and a suit he must be content with the window and no suit.  If we think of him as part of the community, the community has lost a new suit that might otherwise have come into being, and is just that much poorer.

The glazier’s gain of business, in short, is merely the tailor’s loss of business.  No new “employment” has been added.  The people in the crowd were thinking only of two parties to the transaction, the baker and the glazier.  They had forgotten the potential third party involved, the tailor.  They forgot him precisely because he will not now enter the scene.  They will see the new window in the next day or two.  They will never see the extra suit, precisely because it will never be made.  They see only what is immediately visible to the eye.

The Fallacy of the Broken Window exposes the lie that, as one Austrian Economist put it, “the … destruction of wealth fuels its creation.”   He then goes on to summarize the Fallacy and concludes:

You can see the absurdity of the position … when you take it to absurd extremes. If the broken window really produces wealth, why not break all windows up and down the whole city block? Indeed, why not break doors and walls? Why not tear down all houses so that they can be rebuilt? Why not bomb whole cities so construction firms can get busy rebuilding?

It is not a good thing to destroy wealth. Bastiat puts it this way: “Society loses the value of things which are uselessly destroyed.”

But Big Government frequently peppers hammers us with the message that we must create new wealth by destroying old wealth!

And that’s where Cars For Clunkers comes in.  Here’s a quick summary of the program and where it goes wrong.

  1. The Federal Government takes tax-dollars, or borrowed dollars (to be paid back later through taxes), and offers to hand that money to people who will trade in pre-selected older cars; the money is to be used toward buying a new car; then the government takes the traded-in car off the road, and junks it, often by destroying the engine; the “subsidy” given toward buying the new car (for each trade-in) is $3,500-4,500
  2. If the value of the trade-in car is less than the $3,500-4,500 handed in trade value the government has overpaid for the car, despite that the government is about to junk it, thus ensuring that no value will be received in return.
  3. If the value of the trade-in car is more than the $3,500-4,500 handed, the government still derives no value from the trade because it’s not reselling it; it’s junking it and stripping it for salvageable parts (which are minimal)
  4. The net number of cars on the road remains the same; maybe net emissions drop or maybe fuel-usage drops (because of better fuel efficiency) in the aggregate, but maybe not! (more on that below)

So, in this new version of the Broken Window Fallacy, our modern-day Window Breakers are destroying drivable cars, then handing out confiscated or borrowed money to the people who are allowing their “windows cars to be broken” because other people are paying for these windows cars to be replaced with newer, better, sexier models!

They do this in the name of saving the environment from pollution, or saving on “waste” through fuel-efficiency, or preventing global-warming through reducing emissions, or whatever.  It really doesn’t matter what justification they’re using, it’s wrong on several levels.

It destroys wealth by not letting these cars be used up over their useful life.  It destroys wealth by routing scarce resources into activities – in this case, car building – that wouldn’t otherwise take place, denying other industries access to those resources.  It destroys wealth by taking on liabilities, through borrowing, that have to be paid back later by taxpayers (reducing their purchasing power in the future) or by taxing them immediately (reducing their purchasing power today).

Also, building the new cars emits all kinds things into the atmosphere and gobbles up energy in the production process!   So any gains in emission and efficiency are offset by that, too!

Guess what else proponents of this destruction are missing?

They are oblivious to how the incentives will change future behavior.

These people traded in a car they’ve been likely to drive less.  We can safely assume these cars didn’t get as good gas mileage or were older, “clunkers”, because they were targeted for these reasons.  These cars also may not have been driven at all, or driven rarely.  However, they’ve been used to help people get a vehicle that they’re now more likely to drive more frequently!!!  More driving means more emissions, even if the emission per unit of travel is less.  More driving means more fuel consumption, even if the fuel consumption per unit of travel is less.

See, when you change the incentives, you change the behavior.  The people who owned these traded in cars were incentivized to drive them less by having to pay more for a unit of travel, and by having to conserve the remaining life in the car, which may have been approaching the end of its life over the next 5-10 years.  Now?  Not so much.

In fact, the New York Times reports, “Michael Gerrard, director of Columbia Law School’s Center for Climate Change Law, said in a statement that the cash-for-clunker program is not a cost-effective way to reduce fuel use or greenhouse gas emissions. Any energy savings, he said, could take several years to realize, considering the time it takes the fuel savings from a new car to exceed the energy cost used to make it.

Who are the favored parties?

The subsidized consumers, of course.  But also the favored industries, who have had their goods favored at the expense of other industries.  The government isn’t handing out money to go buy [fill in the blank], yet they’re siphoning off money and resources from a finite supply and putting it into one area, at the expense of other areas.

Think the Auto-Dealers liked it?

Look at this:

“It was an absolute success,” said Michael J. Jackson, chief executive of AutoNation Inc., the U.S.’s largest chain of auto dealerships. “There’s a very compelling case the government should put more money into it. It’s a great stimulus to the economy.”

Of course!  The “government” should put more money into it.  Let me fix that quote to show you what it should say if it were telling the truth.

“It was great for us, though a miserable failure for taxpayers and other industries,” said Michael J. Jackson, chief executive of AutoNation Inc., the U.S.’s largest chain of auto dealerships. “There’s really no case to be made that the government should confiscate or borrow more money to put into it.  But it’s a great stimulus to my bank account, so I don’t care what happens to the people picking up the tab!”

Who were the losers?

Everyone else, especially the taxpayers.  And other businesses and industries, especially ones directly impacted by trading these cars in instead of servicing them, auto-parts sellers, mechanics, etc.

The funny thing is that down the road even the dealers will suffer, because this program created false demand and just kicked the can down the road so that the dealers could put off their day-of-reckoning a little longer.

Want to feel some outrage?

Read this story and watch the video, especially watch the video at the 2 minute mark on where they discuss how the cars are junked, and how otherwise re-saleable parts are destroyed in the process.  Perfectly usable cars being destroyed!  And, as an added bonus, Big Government makes a complete mess in administering the program (but don’t worry, they’ll run nationalized health care flawlessly).

We’re not being fooled.  The majority of American people understand that this program is corrupt and just 35 in 100 Americans are in favor of it.

But since we’re living in the age of Big Government, so let’s go all the way with this!

Why stop at cars?  In fact, the Wall Street Journal today asked, Why not a “Cash for Everything” program?

Let’s blow up buildings and rebuild them with subsidies to stimulate commercial building.  Let’s burn down homes and rebuild them with taxpayer funds to stimulate the homebuilding industry!  Let’s break up all our fine-china and buy everyone a new set!

Or maybe not.

Let’s just point out one last thing about the way Cash For Clunkers was run, and how it exposes Big Government hypocrisy.

Very poor people, the car-less among us, who don’t have any private transportation of their own, and who Big Government always profess to help, could have really used those cars.  They could’ve been given to people in need.

This summer I donated my “clunker” to the Kars 4 Kids charity, which then sold it and used the money to help poor children.  I’ll bet you my shiniest nickle that this government program has caused material hurt to charities like Kars 4 Kids.  And not just this year, but also in future years since many cars that may have been later donated to charity had their end-life pushed up to the present day and therefore won’t be available for donation in the future.

Just another sad instance of the Bastiat’s “unseens” or, in words we like to use, “what-might-have-beens.”

The program should probably be called “Cash From Clunkers” since this bunch of Big Government phonies are possessed of such little brain-power that they can only themselves be referred to as Clunkers.  Then again, referring to it as “Cash From Clunkers” also obscures the fact that though they are delivering the money, it’s not their money.  It’s our money.  Or China’s money that they’ve borrowed and we will have to pay back someday.

Anyone suspect that this whole program might just be one ruse to prop up Government Run Motors or as a payback to the Automobile Unions?

Whatever.  It’s corrupt.  Another example – in a long and growing list – of corruption and Big Government going together.

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UPDATES –  Below by Date – how did our predictions go relative to what really happened?  Read the results and decide for yourself.  (N0, we’re not prophets, we just have common sense and an understanding of basic human behavior, mysterious commodities that appear to be absent in politicians.)

UPDATE: October 4, 2009Cash for Clunkers Fails to Help Economy and Environment

Last week U.S. automakers reported that new car sales for September, the first month since the clunker program expired, sank by 25% from a year earlier. Sales at GM and Chrysler fell by 45% and 42%, respectively. Ford was down about 5%. Some 700,000 cars were sold in the summer under the program as buyers received up to $4,500 to buy a new car they would probably have purchased anyway, so all the program seems to have done is steal those sales from the future. Exactly as critics predicted.

Cash for clunkers had two objectives: help the environment by increasing fuel efficiency, and boost car sales to help Detroit and the economy. It achieved neither. According to Hudson Institute economist Irwin Stelzer, at best “the reduction in gasoline consumption will cut our oil consumption by 0.2 percent per year, or less than a single day’s gasoline use.” Burton Abrams and George Parsons of the University of Delaware added up the total benefits from reduced gas consumption, environmental improvements and the benefit to car buyers and companies, minus the overall cost of cash for clunkers, and found a net cost of roughly $2,000 per vehicle. Rather than stimulating the economy, the program made the nation as a whole $1.4 billion poorer.

UPDATE: October 23, 2009 – Dealers say Cash for Clunkers has made cheap, used vehicles harder to find

In his 20 years in the business, salesman Mark Sauer has never had a tougher time finding inexpensive used cars.

“It’s never been this bad,” said Sauer, buyer and sales manager of Vaccaro’s Auto Buyers of Reading, 805 Hiesters Lane.

“Customers used to be able to find a good car for their son or daughter to take to college for $2,000 or $3,000, but now that same car may cost $5,000,” Tabakelis said. “It’s sad.”

He, too, blames cash for clunkers, which has led to fewer vehicles being available at used-car auctions, and the recession.

You used to be able to find a decent car for $2,500, and you can’t anymore, especially in the past two months,” said Arie Garcia, the association’s office manager.

Another problem is that used-vehicle prices have quickly risen above their book values, making it tougher for customers to secure financing, Garcia said.

“Cash for clunkers really hurt the used-car industry,” she said. “I think it hurt more people than it helped.”

UPDATE: October 29, 2009 – Taxpayers paid $24,000 per car

The Cash for Clunkers program gave car buyers rebates of up to $4,500 if they traded in less fuel-efficient vehicles for new vehicles that met certain fuel economy requirements. A total of $3 billion was allotted for those rebates.

The average rebate was $4,000. But the overwhelming majority of sales would have taken place anyway at some time in the last half of 2009, according to That means the government ended up spending about $24,000 each for those 125,000 additional vehicle sales.

UPDATE: October 29, 2009Cash for Clunkers Massively Distorted GDP

If anyone mentions the just-released 3.5% U.S. third quarter GDP growth, just throw this chart in their face. Cash for Clunkers clearly distorted the U.S. economic figures in an unsustainable fashion.

Next quarter, we won’t just be returning to business as usual for auto output. Don’t forget that Cash for Clunkers pulled future auto demand, ie. some of Q4 demand, into Q3. Thus Q4 is likely to be very weak since many people who planned to buy a car in Q4 probably took advantage of Clunkers and bought in Q3.

Next quarter, not only are we unlikely to get Q3’s boost, but motor vehicle output data could subtract from GDP as well. So watch out for the cliff…

UPDATE: March 23, 2010 – Car Sales ($millions) Reported by Dealers

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45 Responses to “Cash For Clunkers is a Modern-Day Version of the Broken Window Fallacy”

  1. jASON Says:

    Maybe we could take the Republican’s stance of every man, woman and child for themselves? We won’t do ANYTHING to help the American people. We’ll stand around while our beloved Big Business rapes and pillages, I mean, profits exorbitantly from the citizens of the US. We’ll all stand around bragging about how our business just rammed another one up the a#$ of our fellow Americans. Its the American way, right? Then, we’ll looked confused and befuddled when the American people finally go broke, have no jobs, no savings, no health insurance and no real hope for the future. Brilliant!

    • admin Says:

      Please read the blog post before commenting. If you did, you’d see that this program is making “every man, woman and child” – except for a few – worse off.

      If these policies are continued, then your dystopia of an America that “finally go[es] broke, have no jobs, no savings, no health insurance and no real hope for the future” will come true. Big Government is taking us there by leaps and bounds each day. is about making all American people better off through real wealth creation, not the establishment of a vampiric, parasitic society based on the punishment of personal responsibility and hard work through redistribution and theft.

      The republicans and democrats alike have had a hand in this.


    • Jeff A. Says:


      Who is “Big Business”? Isn’t it generally made up of millions of shareholders, most of whom are probably US citizens? If you’re so bullish on “big business” making so much money, then go buy their stock and become rich! What’s stopping you? The last time I checked, a brokerage account can be opened for a few hundred dollars. This same concept also applies to all the people who complain about oil companies. Go buy stock in oil companies or speculate on oil futures if you’re so worried about prices going higher. And yes, competition (not socialism) should be the American way. This is how jobs and wealth are created.

    • Rob Says:

      Jason: Milton Friedman wrote “When everybody owns something, nobody owns it, and nobody has a direct interest in maintaining or improving its condition. That is why buildings in the Soviet Union –like public housing in the United States –look decrepit within a year or two if their construction…” I thought of this when I read your comment that “We won’t do ANYTHING to help the American people.” You imply that “Cash For Clunkers” helps “the American people.” It clearly does exactly the opposite. How does taking money from my pocket to make it easier for somebody else to buy a new car help “the American people.” What would help “the American people” is for the Government (not the same as “the People”) to play no favorites, erect no obstacles to productive enterprise, and not confiscate the fruits of Peter’s labors to make life easier for Paul. “I am for doing good to the poor, but I differ in opinion of the means. I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it.” –Benjamin Franklin

    • Steve Says:

      You’re an idiot. If you actually new a thing or 2 about economics 101 or how the government works you’d be quite surprised to see that the government is the primary reason why we have the problems we’re facing today. That’s with healthcare and the rest of the items you ramble on about.

    • Richard Foster Says:

      Jason – Yours is the old “if someone else doesn’t give me money, where am I going to get it” argument! Most of us want to earn the money for the car ourselves rather than make our children pay for it! So, instead of big business raping and pillaging me, you want to do it! No thanks! As if being raped and pillaged by the supporters of the liberal government is any better than being raped and pillaged by big business! At least with big business I can choose not to participate!

  2. Mike Walsh Says:

    Jason, this doesn’t do anything but help a few at the expense of the many.

  3. Dabs Says:

    Jason – that is truly a non-starter and mindless response to a logical and well-considered article. To generally demonize “big business” demonstrates a total lack of understanding of economics. Sure, there will always be a few big businesses that operate unethically. But what about the majority of businesses that create jobs, boost the GDP and put money in the pockets of all their employees? In the case of Cash for Clunkers, the “big business” you should be railing against is GM… which is “raping and pillaging” us, the taxpayers, to the benefit of no one. It’s the government operating the EXACT SAME WAY you claim all big businesses act. No one benefits from this program. Please consider the big picture next time instead of just issuing a rote political argument you learned from watching prime time news.

  4. James Says:

    I wonder how many of the people who entered into this “Clunkers” program can really afford the new car payments? I wonder if this is yet another way in which the average American household can get become more sunk into debt (along with the mortgage they can barely afford). How does destroying vehicles that still work align with the values of our society? I thought this whole recession was making all of us more focused on living within our means. It all seems so wasteful and so fake. When will it end?

    • admin Says:

      Excellent thought James. It would be interesting to see if credit standards were relaxed to allow more lending to happen through this program.

  5. Tyger Says:

    I bought my car in 1998, when it was 2 years old. I am holding onto it as long as I can. Just don’t *want* to buy a new car yet, much less a pre-owned. It gets great gas mileage, but it’s not as “pretty” as a new car, nor does it even have a CD player in it yet. But it runs, is economical, and gives me VERY little trouble. Why? It’s a Saturn. I’d like to wait until Saturn is no longer a GM company to make sure they don’t screw it all up.

    • Jaime Says:

      I agree with you. My Saturn is only 7 years old as opposed to your 13, but I always laugh at the commercials for other cars (both foreign and domestic) being all excited about 26mpg on a brand new car. I routinely get 30-31 for day to day driving, and 37-40 (highest ever was 42) for long trips. Will be interesting to see what happens to them under Penske.

  6. 1HappyFool Says:

    As cars get closer to the end of their life, they move further down the economic ladder. The SUVs and pickups often make their way out to rural areas where they become workhorses for a final few years. Other cars are bought by other low income people as “transportation specials”. By tampering with the supply chain in this way, the value in these destroyed cars will be lost to the people who will need it most in a few years. The rural poor will become poorer. More of the urban poor will be forced onto public transportation so they can be mugged again. Eventually, this temporary influx of high MPG but low power vehicles will result in an excess of low powered transportation specials, but the people who need 4WD and enough power to haul a trailer loaded with 40 bags of fertilizer will be SOL.

  7. Amanda Says:

    Thank you! I’ve been waiting for someone to write an article like this. I feel better knowing I’m not the only one who feels this way. I’m going to share this with everyone I know and hopefully they’ll take the time to absorb the message.

  8. kane Says:

    Great article. I have a “clunker” right now and could trade it in for $4,500 back. I have not done it, and will not do it) out of principle.

    This program just hurts poor people and charities who need those cars now more than ever.

    We must throw the bums out before it is too late. The federal govt seems to ruin most everything they put their hands on these days.

  9. Jeff A. Says:

    Dear Mr. President:

    Please quantify and calculate the return on investment for your $1 billion (and posssibly more) cash for clunkers program. If you cannot calculate it or the return is negative (even infinitely negative), please do not do it.


    The U.S. Taxpayers

  10. jonbeth Says:

    I bought a used Chevy express 3500 Cargo van 3 years ago for $7500. Now after the ‘Clunkers’ program it is worth $2500.
    thanks for meddling with my bisiness.

  11. GotLife Says:

    Excellent article. Best analysis I’ve read to date. Thank you for posting!

  12. jonbeth Says:

    I bought a Large van 3 years ago for $7500.
    After the ‘Clunkers’ my van is worth $2500.
    Thank you for meddling with our business.

  13. KCO Says:

    In reference to the fallacy of energy usage dropping as a vehicles energy efficient is increased, I think it would be beneficial to bring up Jevons paradox. Basically it states that increasing energy efficiency, in addition to reducing the amount needed for a given use, lowers the relative cost of using a resource – which increases demand and speeds economic growth, further increasing demand. Wiki has a pretty decent explanation.

  14. Justen Robertson Says:

    Most of my life I’ve saved money by buying other people’s “clunkers” and stringing them along for as much as I could get out of them. All said, the total cost of ownership was probably double what I paid for the car initially – but still much, much cheaper than buying the POS I could have afforded at a dealership with their markup.

    $4500 is more than most of these “clunkers” will sell for on the open market – but isn’t the point that they’ll be paying for it eventually anyway? How much more is the owner going to pay in taxes? How much more is he going to pay for a new car than he otherwise would have, for that matter? It’s a standard marketing technique to give people some “free” money to spend so that they’ll actually end up spending more than they otherwise would have. For instance, if you give someone $250 for signing up for a credit card at a department store, studies and market research show that they’ll actually end up spending up $400 or so more on average, and that’s before you account for interest paid. How much more will a person spend on a car (or more aptly, how much more debt will they take on) when they think they’re getting $4500 in “free money”? It’s a nice racket, if you’re a car dealer.

  15. Bruce Says:

    This article shows a much better grasp of the concepts of wealth and economics than most Americans possess (especially politicians, of course). And the American public has a much better gut-level grasp of the subject than most of the rest of the people on the planet. So that speaks highly for the article.

    However, the subject is, in fact, even more complex than the article suggests. It is true that the government should donate each of the cars to the carless needy; rather than destroying an object that does indeed have value for political grandstanding purposes. But some types of wealth are of a higher “quality” than other types. *Assuming* that modern cars are of truly superior quality to the “clunkers” — then this program encourages people to aquire higher quality wealth objects. Which is, in fact, an economic long-term positive for the individuals and the country. This is counterbalanced by the economic waste, inefficiency, and the physical waste of this program discarding the “broken windows” into the waste stream.

  16. Elizabeth Says:

    I am appalled at what the government will do to help out Big Business. This is a sad state of affairs, and I’m sure won’t be the last.
    And if one can only afford a clunker, how will they afford all the taxes, new payments, and increased yearly (depending on state) registration fees?
    This truly does not seem to benefit anyone but the car companies. They should be allowed to suffer the consequences of their actions instead of getting a pat on the back and a bail out!

  17. shea Says:

    atlas will shrugg

  18. Mark Says:

    As someone recently said to me (I drive an early Beetle): “Actually, the only real benefit of the ‘cash for clunkers’ program is IF a collectible or would be collectible car is destroyed. It increases the value of any remaining model. For example: say someone ‘cashes-in’ a 1970 VW Beetle, that VW is destroyed, hence, a fewer number of VW Beetles remain, therefore, the remaining cars become more valuable.”

    If you believe that then you are just as foolish as the nitwits in D.C. that are promoting the program. The loss of one in a million (even a few hundred thousand) is not going to increase the value of a remaining supply.

    • Critical Thinker Says:

      Good thoughts, but cars over 25 years old do not qualify for the program. So those truly classic cars are safe from the mindless destruction of the Cash-for-Clunkers program.

  19. Mike Walsh Says:

    First, you’d be stupid to trade in any car that was worth more than $500. Second, the sales tax alone in a lot of states would probably reduce that rebate by a third to a half. So, really, what’s the incentive for most people?

  20. Rafael Says:

    This was probably a boon to car dealerships. I’m sure their lobbyists will get a nice bonus from this deal.

  21. Dabs Says:

    Hmmmm? Boon for the car dealerships…? And the government and unions just “assumed” majority control of several manufacturers…? Coincidence? I don’t think so.

  22. Dave smith Says:

    This program is not helping anyone at all! I would love to see the statistics on how many of these U.S. taxpayer funded cars will be reposessed in the first year or two!! Anyone with enough money that wants to buy a new car will do it at some point anyway and this is just getting a lot of people in new cars that will probably not even be able to afford it. Way to go Mr. president! Another Bullshit program that screws American people!!!

  23. Brett Says:

    Let’s not forget where the profits for these new cars are going. Based on market share of cars/light trucks at the end of 2007 and continuing into 2008 (and I see no reason why it would change), the Detroit 3 had 50% market share of new cars/light trucks sold. So in essence, the gov’t. is reinforcing the conditions that have plagued the Detroit 3 for 12 years (loss of 20% of market share). What would have been done for GM and Chrysler if the economy didn’t go south?

    The other problem I’m seeing is the manipulation of this thing, which was retroactive to July 1 sales. They claimed it was out of funds after 4 days, but I’ll bet a large chunk of that was for the 3 weeks of sales prior to this clunker of a program. But what do you expect to something that they pass late on a Friday?

  24. Wolf von Baumgart Says:

    Independant Party of Delaware
    Office of the State Chairman

    re : CASH for CLUNKERS

    When it comes to megacorporate lobbying and special interest control of the politicians currently besetting our federal and state government (at the expense of the general public and small / medium business ) it’s



    Wolf von Baumgart,
    IPOD State Chairman

    P.S. :

    The Independent Party of Delaware has full ballot access and does not charge filing fees. We offer serious alternative candidates a chance to challange special interest dominated politics as usual in the First State. We are in search of candidates for the 2010 general election and currently have an opening in the 37th Representative District Special Election.

    E-mail inquires to:

  25. David Says:

    Everyone forgot something else about this program.

    New debt is created for people who couldnt afford the car in the first place.
    So next the Collection agencys will be the next big boom to this program.
    The repo guys are going to be really busy.

    Has anyone looked at how many large corporations have taken advantage of this program to upgrade their fleets?

  26. Fred Bear Says:

    My favorite line from this post is, “Why not bomb whole cities so construction firms can get busy rebuilding?” Oh, wait…

  27. Pete Says:

    The “clunkers” deal is a lemon. More pay-offs to the unions, just like what was done by giving them a stake in GM. The government steps in and artificially inflates the car buying market, more cars are made, more union jobs. Forget about people being able to afford the payments. This is the Freddie/Fannie debacle all over again. Congress controls the purse strings, the rebate drives down the price, so the lenders are more likely to finance. yada yada yada. But even the car dealers will lose. They have to pay the manufacturer for all these cars they are selling. And to date, the government has been pretty slow getting them the rebate money. Meanwhile, they are still on the hook to the manufacturer. Whats gonna happen when the day comes, and the bill for all the cars they sold and haven’t fully paid for comes due? Bailout? After all, they did prune out all the “republican” car dealers.

  28. Brad Says:

    This cash for clunkers program is so typical of misguided government programs…poorly thought out, very wasteful, does not solve the intended problem, and creates more problems. Now there will be fewer used cars available for those who can’t afford a new car, and fewer used car parts for the wreckers to sell.

  29. Stormy Webber Says:

    Keeping track of all the negative effects of this program is quite difficult.

    5 of the 6 most popular new models purchased after turning in a ‘clunker’ were from foreign manufacturers. Approximately $10,000 of each sale ends up with foreign manufacturers. $3500 to $4500 of that is being financed by US taxpayers. And since manufacturers based overseas employ relatively few US union workers, again, the ones the government intended to help are hurt the most. As pointed out in the article, the program is also making life more difficult for those with lower incomes who will now have to pay more for a car to replace what they are currently driving.

    Since purchased vehicles have to get higher MPG, they are small cars: “econoboxes” or, in the words of emergency room personnel, organ “donormobiles.” Many — and likely most — purchasers traded in cars with higher crash ratings for ones that are more likely to allow or cause injury in a collision. We could assert that one objective of Cash For Clunkers is to increase the demand for a socialized health care system, but that would be giving the administration credit where it is not due. They obviously can’t think that far ahead.

    • Critical Thinker Says:

      I don’t know if this is true or not, but the local news reported that the number one car purchased by these “cash for clunker” car buyers is the Ford Focus.

  30. Jason's Mother Says:


    I recommend the book, “Economics 101 for Dimwitted, Dip$&!%, Know-it-alls.” You are the typical dumb@$$ voting in people based on party lines, while these jerks run this country into the ground. In your entire rambling overture, you didn’t even once make an effort to cite any sort of economic 101 basics. Your incoherence and utter stupidity makes me surmise that you’re a high-school graduate working hard at your 9-5 at McDonald’s as a cashier. You are the epitome of the term @$$hat.


    Your Mom.

  31. Melissa Says:

    Enter: USSA

  32. Jason's Dad Says:

    What your Mom said!


  1. […] this predictable?  Of course. In August 2009 when Cash for Clunkers was announced, we said: The funny thing is that down the road even the dealers will suffer, because this program created […]