Listening to the success claims of the “cash for clunkers” program is fairly amusing, as if standing on the street corner handing out money is some great accomplishment. I recently learned of how it came in under budget (” ‘Cash for clunkers’ program runs out of gas,” Page 1, Aug. 21). Now that is really amusing. The government allocated $1 billion, underestimated the number of people who would line up for “free” money, raised the allocation to $3 billion and then set a calculated deadline to stay under the “budget.” Can anyone say rationing? This is how health care will be run because this is how government works.
If cash for clunkers is so good, why don’t we continue it indefinably? The program is nothing more than another Keynesian approach to spark the economy, which rarely works unless the underlying problems are addressed.
The problem with this and other government stimulus programs is the lack of wealth generation. It is like taking water out of one end of the pool, running down the side in the hot sun, spilling part of it, which evaporates, and then dumping the remaining portion in the other end. Cash for clunkers takes taxpayer dollars, imposes a bunch of regulatory processes at both the federal and retail ends, and gives the money back to certain people (the chosen winners) in the form of vouchers. Then the government counts the transactions and declares success.