yeah! G'damn for-jig-in-ers... comin' over here.. buyin' our scrap and payin' our taxes..
On Tue, Aug 11, 2009 at 2:43 PM, Mark Cookson <[email protected]> wrote: > Regarding #1, that's what government does. It collects funds from the > populous and redistributes them to other members of the populous, some times > spending that money on people that aren't even members of the collective > (foreigners). The unintended consequences of this program are yet to be > known, but I suspect that some mechanics will have less work. It appears > that all that they have done is moved forward a lot of purchases so there's > a spike, but the number of total units will be the same. It doesn't appear > that really poor people are taking advantage of this, and that's probably > good, since there is a definite cost of going from a vehicle that's almost > certainly paid for and switching over to having a car payment and higher > insurance and registration costs (hopefully offset by lower fuel costs). > Regarding #2, there's an implied premise in there, which is that these cars > are actually worth something, and that's not always the case. A false > premise equals a false conclusion, but for the sake of argument, I'll agree > that not all of these "clunkers" were destined for destruction. However, > for the two vehicles that I personally know of (father-in-law and > co-worker), the cars were barely running, requiring hundreds of dollars of > repairs every month and were worth literally nothing as a trade in, except > for scrap. These cars were going to be destroyed by their owners by selling > them to salvage yards for scrap. Instead, they get $4500 for them and they > haven't destroyed any wealth or value. If we get 750,000 bad cars off the > road (US government's estimate), what is the price impact on the other 234.5 > million potential used cars (wolframalpha, number of registered cars in the > US)? That's 0.3% of the total car market. Are we seriously arguing over > the effect of 0.3%? I contend that there will be plenty of used cars > available after this, approximately 233.7 million, in fact. I'm sure needy > families will be able to find good deal from that pool. > > However, what it has done is drive up the cost of NEW cars, though this > cost increase is still largely offset by the CARS program. > > So, the government has decided to give your money to the automakers but has > let the American public decide how to spend it, and the American people have > decided to direct most of that money to foreign auto makers (largely because > the domestic automakers don't have enough qualifying product). It's > democracy in action, and it's messy. > > Mark > > On Mon, Aug 10, 2009 at 11:39 PM, Martin Eby <[email protected]>wrote: > >> At 02:57 PM 8/10/2009, Mark Cookson wrote: >> >> There are two effectively independent pieces to Cash-For-Clunkers.. >> >> 1) Giving folks $4500 to buy new, more efficient car >> >> 2) Having the dealer to destroy old, less efficient cars. >> >> Regarding (1) >> a) The money comes from taxes. The government has created nothing -- it >> has only decided for us that $4500 we might have chosen to spend on >> education, food , health care, or even, perhaps, more fuel efficient new >> cars will be spent on more fuel efficient new cars. Auto workers end up >> with more of our money, teachers, farmers, and nurses with less. >> b) What happens when the artificial stimulus ends and all the people who >> would otherwise need new cars already have them? The immediate benefit of >> the program is apparent, but the inevitable consequence is just as apparent. >> >> Regarding (2) >> Needless destruction of wealth is always, always, always bad economics. >> In this case the reduction in serviceable used cars and used engines will >> drive up the price of those items. Hence this program raises cost for the >> most economically disadvantaged -- those who cannot afford new cars and new >> engines. How many large families (who need a big car) won't be able to >> afford it and so stay with their even more inefficient even older big car? >> >> M. >> >> >> >> > > _______________________________________________ > Miatapower mailing list > [email protected] > http://list.miatapower.net/cgi-bin/mailman/listinfo/miatapower > >
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