UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev | Next
Author: telegraph Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 745895  
Subject: Destroying wealth/industry step by step Date: 8/6/2014 10:49 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 16
"The annals of failed government programs always yield new surprises, and the latest is one for the ages. The White House can't even pay people to buy new cars without harming car makers.

In a National Bureau of Economic Research working paper this month, economists at Texas A&M return to Cash for Clunkers, the 2009 stimulus fillip that dispensed vouchers worth as much as $4,500 if people turned in their old cars for destruction and bought a new set of wheels. Mark Hoekstra, Steven Puller and Jeremy West report their "striking" finding that the $3 billion program's two-month run subtracted between $2.6 billion and $4 billion from the auto industry."

"auto revenues may have plunged by more than what the government spent. And any environmental benefits cannot be justified under the federal social cost of carbon estimate of $33 a ton. Prior research from 2009 and 2013 has shown that the program cost between $237 and $288 a carbon ton.

The basic economic illogic of Cash for Clunkers is that you can't create wealth by destroying serviceable assets and then force-feeding consumer spending on replacements. But the saving grace was supposed to be that at least the auto makers benefited from"

http://online.wsj.com/articles/stimulus-for-clunkers-1407281...


If you want to read the whole article, do a Google search for

WSJ Stimulus for Clunkers

and the whole article will come up.

----

Let's see.....3 billion spent to get negative 600K of economic benefit.

It's the 'broken window' theory. Destroy serviceable assets, destroy a second hand car/parts market, move people into lower cost eco-box cars prematurely.....that they would have bought, and likely would have bought a bigger more expensive car......but didn't because of the loss of a serviceable vehicle......

Let's break more windows. Obviously this program worked 'so well' with its negative benefits and financial loss...... more 'clunkers' programs to lose even more money and keep the economy stalled out!



t.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev | Next

Announcements

Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Managing Your Wealth
Our own TMFHockeypop from Rule Your Retirement fame on the TV show Managing Your Wealth.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Value Hounds

My Big Fat Greek Splat
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement