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Ron Paul on Cash for Clunkers

Texan

Well-known member
Dr. Paul is a little bit goofy at times, but he's one of the few (or only?) real conservatives left in DC.

There is a big difference, in my mind, between letting people keep their own money versus giving them someone else’s.

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Cash for Clunkers

The Cash for Clunkers program has received a lot of attention this week on Capitol Hill and across the country. The program offers a voucher of up to $4500 in federal funds to anyone who trades in a working used car for a new one with better fuel economy. Congress was shocked at how quickly people responded to promises of free money and drained the program, while car dealers have been equally shocked at how slow and arduous the government’s website to claim the rebates has been.

It’s not a shock that people respond to incentives. The program has been deemed a resounding success, and Congress has authorized 2 billion more taxpayer dollars for it. But not everyone is happy about this. Low-income earners who would have been in the market for those perfectly serviceable, working cars will have fewer to choose from, and those cars will probably be more expensive than they normally would have been. Automotive repair shops actively lobbied against this program, as it will destroy many of the cars they would have repaired. They were out-lobbied. And of course, Americans as a whole are hurt, because this additional bailout of auto companies comes at our expense through inflation.

I have introduced a somewhat similar bill that would have provided a much better alternative to Cash for Clunkers because it does not rely on increased government bureaucracy or spending. My bill HR 1768 provides tax credits to people trading in used cars for new cars with better fuel economy. There is a big difference, in my mind, between letting people keep their own money versus giving them someone else’s. It is clear which one a free and fair society would choose. Not only that, but my bill would not have required working, serviceable cars to be destroyed for scrap metal.

Cash for Clunkers is a popular program right now, but in the larger scheme of things it does very little towards accomplishing its stated goals. Requiring cars to be destroyed and new ones made to replace them might help the auto industry in the short run, but any improved fuel economy will not make up for the environmental impact of junking one car and making a new one. So this is not a program that should really make environmentalists happy.

There is also much evidence that the boost in demand for autos, that has made dealers happy, is just borrowed demand from the past and the future. In other words, many have put off purchases they would have made anyway because they were waiting to see what the government would do. Others who would have waited a little longer to trade in a vehicle are accelerating their decisions so they can get in before the money runs out. So I would not be surprised to find that this artificial boom in auto sales is followed by an extended drop. This should serve as a very tangible example of how government meddling in the economy creates booms and busts. While everyone loves the booms, the busts are what creates the crises that government thrives on, and that is what we really need to watch out for!



ttp://www.house.gov/apps/blog/tx14_paul/
 

Lonecowboy

Well-known member
What I was thinking, if they really wanted to help people, why not just line up the clunkers and let anybody trade a car strait across for them. any car, just swap titles. Then people with real clunkers could get a better
( at least in their judgement) car and pay nothing. it would get the worst cars off the road and really help the people that need it the most but can't afford a new one no matter how big the incentives.
 

backhoeboogie

Well-known member
You are at least partially correct. Today at the little grocery store there was a lot full of clunkers. Those buying groceries there probably could not afford a new car. Some of those cars were on their last leg. I have seen much better cars on television news getting their motors seized up on the clunker deal. More fuel efficient and more sightly too.
 

alice

Well-known member
backhoeboogie said:
You are at least partially correct. Today at the little grocery store there was a lot full of clunkers. Those buying groceries there probably could not afford a new car. Some of those cars were on their last leg. I have seen much better cars on television news getting their motors seized up on the clunker deal. More fuel efficient and more sightly too.

Cars are transportation. They get people to the grocery store...to the doctor...take kids to child care...take parents to work. Some people do the best they can with what they have...sightly and fuel efficient or not.

Alice
 

hypocritexposer

Well-known member
BMR, have you taken advantage of the tax credits in Canada yet?

The idea of a tax credit works much better than just doling out someone else's money.

Canada has a stimulus program at present for home renovations/improvements.

Spend up to $10,000, get a $1350 tax credit. It's working so well, they will probably extend it through next year.

no additional debt on the Government's part either.

From what I've read the dealers are still not getting paid for the "Cash for Clunkers" program.
 

Big Muddy rancher

Well-known member
hypocritexposer said:
BMR, have you taken advantage of the tax credits in Canada yet?

The idea of a tax credit works much better than just doling out someone else's money.

Canada has a stimulus program at present for home renovations/improvements.

Spend up to $10,000, get a $1350 tax credit. It's working so well, they will probably extend it through next year.

no additional debt on the Government's part either.

From what I've read the dealers are still not getting paid for the "Cash for Clunkers" program.

We built a new home in 2000. Not in need of any reno's yet.The tax credit program is a much more deficit friendly program.
 

Tam

Well-known member
Does anyone know why they put a limit to how old the cars could be to qualify. Would it not make sense to get the oldest cars off the roads and destroy them as to take somebody's vehicle that is only a few years old and destroy it so someone that can't afford a new car doesn't have access to it. Wouldn't it make sense to limit how new they are, say nothing younger than 15 years qualifies? :?
 
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