Comments on: How Much Per Car Did “Cash For Clunkers” Really Cost?

By: adelinesdad

adelinesdad — Thu, 03 Sep 2009 04:49:18 +0000

Whether it is considered a success or not, I don't see how you can justify taking money from people who don't want to (or can't) buy cars, in order to give it to people who do want to buy cars.

I get it. We're in a recession. Drastic times call for drastic measures, etc. But why should I be punished if I don't want a new car–or if I already own a fuel efficient car? Too many people are ignoring the fact that there's no such thing as free money. It comes from somewhere. Or, to put it more accurately, it comes from someone.

By: mikkel

mikkel — Tue, 01 Sep 2009 23:37:05 +0000

Yeah at this point I find it hard to say that the program was negative…the entire program really won't be able to be analyzed for about 6 months. Critics argue that all it did was push demand forward, which may be true but is beneficial if it helps jumpstart parts of the economy. If it doesn't — well no one will be talking about it because there will be bigger problems.

By: Father_Time

Father_Time — Tue, 01 Sep 2009 23:25:38 +0000

Speaking of Cash for Clunkers, how much can we get for George Will?

By: GeorgeSorwell

GeorgeSorwell — Tue, 01 Sep 2009 22:59:41 +0000

An article in Slate last week made this claim:

Cash for Clunkers, by contrast, has had a much bigger impact. According to Paul Taylor, chief economist at the National Automobile Dealers Association, the average new car sold in the United States so far this year has cost $29,106. Those 625,000 cars sold through Cash for Clunkers, then, probably account for about $18.2 billion of retail sales. They've also spurred a lot of secondary economic activity—taxes paid, dealership advertising, overtime wages for dealership employees.

And:

If we use Taylor's estimate, about 250,000 extra cars were purchased (40 percent of 625,000). And if each cost $29,000, those sales generated about $7.3 billion in revenue in the space of a few weeks. That's a pretty good return on $2.6 billion in government spending. Let's be more conservative. Say only 20 percent of the clunker traders were extra demand, and the cars they bought cost $25,000 each. That's still an extra $3.125 billion in sales for dealers. What's more, the sales represent only a portion of the economic impact. Ford, for example, announced that it is increasing production of some models.

Also, Calculated Risk ran the numbers differently last week, dollars-per-person-per-state. (Link includes a sortable chart.)