The administration has already run out of the $1 billion that was set aside for the program. They are voting to free up a couple billion more to use as rebates for the program. As a stimulus program it seems to be working as intended but the response has been greater than anticipated.
Wouldn't this have been a better program if it had been done before the bailout? Instead of pouring all the cash to keep GM afloat and then taking them over couldn't we have spent the money orginally to help purchase cars and stimulate the market? Could consumers have used $4500 in cash rather than $4500 off the car?
On a $30000 vehicle knocking off $4500 would drop a payment approx. $100/month based on a 48 month loan. If someone can afford the loan payments would $4500 all at once do more for their standard of living then saving $100/month? I know I would rather have the cash.
Another point. Are the loan requirements being lowered like the home loans were and we'll have thousands of repossesed cars in a year or two? Also how about unintended consequences? Where will all the clunkers go? Do we have the junkyards or will these cars line our waterways?
My final question is: If the government has underestimated the cost of this program by three times and it gets put on hold 1 week after it starts how can anyone think they can run a healthcare program and that it won't cost trillions more than the estimates?
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Tired,
ReplyDeleteYou are 100% right on when it should have been used. The problem is that if it happened that way, the federal government wouldn't be in control of two of America's car companies.
The other thing that would have been nice is if it had required that the cars purchased were manufactured in America. Why should we stimulate the economies of Japan, Korea or Italy?