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Thread: A Stimulus Clunker

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    Banned Eric Stoner's Avatar
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    Default A Stimulus Clunker

    Another Obama program chock full of unintended consquences that hurts low income people. The Car Allowance Rebate System aka "Cash for Clunkers" cut the supply of used cars. According to study by Edmunds.com 575,000 of the 700,000 cars sold during the "clunkers" program would have been bought even if no subsidy was available. Thus each sale cost taxpayers not $4500 but $24,000.

    The average cost of three year old cars has now increased 10% since last summer. Who generally buys used cars ? Low income people.

    Was there any environmental benefit from removal of the clunkers from our roads ? Nope. According to research at U.Cal - Davis the reduction in CO2 cost $237 a ton. Contrast that with the international price of carbon credits of $20 a ton. The reduction in emissions is less than what Americans emit in one hour.

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    Default Re: A Stimulus Clunker

    the unintended consequence of rising prices for second-hand cars was raised at the time that 'Cash for Clunkers' was first discussed in Dollar Den ... with associated pessimistic criticism. Also this problem extends well beyond America's borders in that there is now a shortage of older used cars for export to Mexico and central / south American countries. This in turn means that instead of a Mexican worker putting his 20 year old Chevy 'out to pasture' in favor of a 10 year old Chevy, that he will now have to keep driving the 20 year old gas guzzling smoke belching rattletrap for a few more years ! So in terms of 'global' CO2 and tailpipe pollution the world in general is far worse off as a result of 'Cash for Clunkers' requiring the de-facto destruction of a large number of 5-10 year old 'Clunker' trade-in cars that would otherwise have been resold to America's 'poor' or exported to even poorer Mexicans / central Americans / south Americans.

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