Breaking: Cash for Clunkers was a dumb idea

[Al B. Sure!]

Pretty sure that was Jaguar.

Jaguar

[Kuciwalker]

[Thoth]

So what will the poor drive?
.

us decadent crackers poor folk usually wind up taking the bus or walking.

[Al B. Sure!]

us decadent crackers poor folk usually wind up taking the bus or walking.

I could respond to you by saying that whatever you're trying to say isn't much of a response to what the article's (and my) point was and could very well be an indication that the point is even more valid... or I could mention that to an extent, poor people defined by whatever metric you want, probably drive no less than wealthier people... in fact, I think income and annual mileage are inversely correlated... I seem to remember McCain mentioning this... also, the majority of Americans live in areas without significant public transportation service.

[Kuciwalker]

A priori you shouldn't expect any specific relation between income and commute time because there are competing effects of unknown scale.

[GePap]

If someone is looking to buy a use Cadillac Escalade they are clearly not looking for savings - you can buy a brand new car for much cheaper than the $25,700 price supposedly pre-clunkers, and perhaps even a new pick-up truck, though nothing too fancy.

He should have used a less ostentatious example.

[Al B. Sure!]

If someone is looking to buy a use Cadillac Escalade they are clearly not looking for savings - you can buy a brand new car for much cheaper than the $25,700 price supposedly pre-clunkers, and perhaps even a new pick-up truck, though nothing too fancy.

He should have used a less ostentatious example.

Poor people drive used Escalades And Chrysler 300's.

[trev]

Julia Gillard in Australia is learning fast from Obama, at the election we just had she promised a cash for clunkers scheme, saying it would help reduce CO2. She took money that was earmarked for solar panel rebates etc to fund it. Yet there are independents who have promised to support her to form the next gov't in the hung parliament.

[Hauldren Collider]

http://www.youtube.com/watch?v=zA9ZJbYF2Sc

The 7 points of Obamanomics:
1. Big government
2. High spending
3. Running up debt
4. Rewarding special interests
5. Claming environmental benefit
6. Claiming stimulus
7. Displaying ignorance of basic economics

[giblets]

So for $3 billion in rebates we got a reduction in carbon emissions worth $250 million ($20/$237 * $3 billion = ~$250 million) and 125,000 additional car sales. With the average price of a new vehicle in August 2009 being $25248 I guess that means an increase in automobile sales of over $3 billion. So if one accepts that government spending in a recession causes resources to be used more efficiently, and if you accept that carbon emissions are a problem, then this doesn't seem like such a bad idea. We got around $3.4 billion in benefits for a price of $3 billion.

Now I know that allegedly the average price of a used car has increased by 10% since a year ago, but there are other factors to consider. If used cars are an inferior good and people have lost income, there should be more demand for them. And we should consider that the program affected certain kinds of cars. A 36% increase in the price of a used Cadillac Escalade does not affect the poor but does bring up the average.

[MRT144]

Ummm, you're doing it wrong gribbler. There absolutely were not $3 billion in car sales induced alone by cash for clunkers.

[giblets]

How much do you think those additional 125,000 cars are worth? And let's not forget that a net increase in car sales of 125,000 should increase the price somewhat.

[MRT144]

It's fallacious to believe that 125k of "increased" sales occurred solely because of cash for clunkers. People who were going to get a new car and had an old one are counted as having benefiting from C4C even though their decision wasn't affected by the program.

It's the same fallacy of touting the homebuyers credit as working. There are first time home owners benefiting from the program who would have made their first time home purchase with or without the credit.

and if you argue that the credit provides more disposable income to people who would have purchased a car anyway, i'd point out that most cars are financed and that the disposable income savings from the credit would be dispersed over the terms of the financing.

[giblets]

I'm going with the number reported by the Boston Globe opinion piece... the total who benefited from C4C is ~700k and they estimated a net increase of ~125k, meaning they think ~575k of those people would have bought a new car anyway.

[MRT144]

I'm going with the number reported by the Boston Globe opinion piece... the total who benefited from C4C is ~700k and they estimated a net increase of ~125k, meaning they think ~575k of those people would have bought a new car anyway.

You'd also have to smooth sales over a period of time to account for bringing demand forward. http://calculatedriskimages.blogspot...010-short.html

Look at that spike!