Honk if you thought Cash for Clunkers was a mistake
The first year of the Obama presidency was 2009, and if you recall, it didn’t take him long to start making costly mistakes. One of the early ones was his “Cash for Clunkers” program.
If you don’t remember the details – and yes, I’ve tried to forget them, too – the program let everyone trade in their old cars for up to $4,500 in cash if they were willing to use that money to buy a more fuel-efficient vehicle.
The official name of the program was the Car Allowance Rebate System, and the goals were to jump-start U.S. auto sales, stimulate a lousy economy and clean up the environment by getting gas-guzzling vehicles off the roads.
The program was considered pretty much a failure from day one, but it’s back in the news again because researchers at Texas A&M University did a study measuring the economic impact of the program.
They determined that the program not only failed to help the auto industry, but it actually decreased industry revenue by $3 billion in less than one year. Also, the so-called “stimulus” cost us taxpayers almost the exact same amount – $3 billion. The program ran out of money one month after it started and two months before the government expected.
As bad as the Cash for Clunkers program was, we can now look back on it as one of the “success stories” of the Obama Administration. The loss of $6 billion is a drop in the bucket compared to the other financial fiascos that this administration has brought on us.
And one positive thing you can say for this program – at least nobody used the cars to spy on us, unfairly target conservatives or take away our guns and drive away with them.
Obama’s Cash for Clunkers program was one of the early signs that we were dealing with an incompetent government. Think back – when was the first time you knew things were going to get a lot worse once Obama was elected?
A political committee decided to come up with a personal transportation system to solve the US dependence on foreign oil. They chose the camel as their solution. Two models could solve all personal transportation needs: one-hump and two-humps.
They worried about CO2 emissions caused by camel breath, but felt that camel droppings could compensate for this shortcoming because the farmers could use the droppings as plant fertilizer. However, there was a collection and distribution problem with the camel droppings.
They created a new government agency, the Bureau of Camel Waste Management, reporting to the Secretary of Transportation. Their work force created jobs that required more camels and the farmers did not want the camel droppings. They proposed a $40 million advertising campaign to convince farmers to buy camel droppings. They offered Metro Golden Musloff the movie rights to their environmental impact statement to pay for the ad campaign. MGM didn’t want it. Barbie Strangeland offered to sing a personal greeting for anyone’s cell phone if they would contribute to support the camel campaign. They ended up borrowing from the Federal Reserve to pay for the ad campaign, and then killed the project because nobody wanted to buy camels. They blamed the automobile industry and “big oil” for deceptive advertising and outright lies to the American public.
They finally decided to pass the “Cash for Clunkers” act. Later, they found out that 70 percent of the new car buyers chose foreign cars. They also discovered that these same car buyers bought new cars and trucks with the same or even lower gas mileage than their old clunkers.
The program saved no oil consumption and added to the balance of payments deficit with Japan, Korea, and other foreign car manufacturers. Usable late model used cars were destroyed, creating a glut of really old gas-guzzling clunkers in used car inventory.
Japan wanted payment for the cars in their native currency, not US dollars, and they certainly did not want any more US Treasury bonds at any interest rate. They also emphatically did not need any camels and had no use for camel droppings.
Cash for clunkers did have one positive out come. It got a lot of “Obama for President ” bumper stickers off the road.
The day he was elected!
The day he was introduced 2 America as oprahs favorite senator!
I HAVE A 2000 PONTIAC GRAND PRIX IT HAS 205000 MILES ON IT SHE RUNS GREAT IS DOES NOT HAVE ANY GPS OR THE ONSTAR SPY EQUIPMENT ON IT AT ALL AND NOW FIND OUT OUR ENEMY GOVERNMENT USES THIS EQUIPMENT TO SPY ON US I AM GLAD DOES NOT HAVE A GPS OR THE ONSTAR SPY EQUIPMENT IN IT AT ALL THANK GOD IT DOES NOT HAVE ANY SPY EQUIPMENT LIKE THAT IN THE CAR.
I bought a new car and traded my 1999 ford taurus with 150,000 mikes for a 2009 ford fusion sel i got 4500 iff the price and also got a 4500 dollar tax bill right along with the car.
The irs considered the 4500 dollar a taxable income on my return. The government gave and took away at the same time i onoy git 1000 bucks trade allowance for the 99 taurus
If the $4500 was treated as normal income, the tax on it was at your marginal rate, which I’m sure was not 100%. You most likely got to keep $3500 of it.
The older cars were able to be fixed by the owners. With the new cars it is a matter of replacing parts until you get the right one…. Old Mechainic
The most important aspects of the Cash for Clunkers program was the loan debt, the revenue generated by higher registration costs, higher Insurance and Maintenance costs This with the ability of many government agencies being able to control your vehicle. Debt is a soft form of Slavery,.
I own a forty year old Pickup and after rebuilding the engine & trans, I paid the less than three serviceings on my late model vehicle ( which I got rid of!}
Frank, There is a very good reason for the cash for clunkers program. These older cars are EMP hardened vehicles and are therefore protected against an EMP strike. Most, if not all newer cars have hidden microphones that can listen to your conversations. An older vehicle, or clunker, does not have the spy capabilities that newer vehicles have. Anyone who participated in this nefarious program is now being spied on in their new cars.
You are absolutely right! First thing I thought of when I read the article. They wanted all the spy-proof, EMP-proof vehicles out of circulation…permanently. They were meticulous with it, too! Every single one of them were scrapped. Too bad we didn’t get it back then!
Truth! Just another way 2 control us…
“Hardened against EMP” – ahh, no. The purpose of the program was to drive out secondary markets for used parts. The parts/engines that were turned in were destroyed as part of the program’s parameters and thus removed from any secondary parts market – engine blocks were punched to never be reused, etc. This was a deal between the auto manufacturers, OEMS parts makers, and the U.S. Government.
I knew things were going to be bad when this peckerwood was campaigning and the day he was sworn in I gritted my teeth and said…Oh My God, all these moron voters actually put him in office….and then they did it again, along with Aunt Jemima voting 10 times and all the fraud. We have one year, six months and nine days….I count them off every day wishing that January, 2017 would get here. Hopefully the morons will not vote for Hiliary, lest this entire country be damned.
A friend of mine owns a very successful auto auction. He told me that the cash for clunkers program drove up the value of used cars immediately. Since he got a percentage of every car sold,
Well, hello. Only good thing I was it removed 100,000 Obama bumper stickers from our roadsl
Neal Boortz did his best to warn Americans about the hack long before the election.
Cash for clunkers suckered alot of people to go buy what they couldn’t afford in the first place. They would have already bought a new car if they could’ve looked good on paper though!
“Cash for Clunkers” did help gov to start spying on us — newer cars have GPS trackers in them —- can be shut down any time by gov — can ” fix ” how much MPG you can have. So did program give gov a hand up on these things ?? At our expense of coarse
It got a lot of old polluting and unsafe cars off the road and stimulated car sales (while the program lasted). A friend of mine had a “clunker”. She was putting money into it every month to keep it going. She traded in for a new car. Car payments – yes- but better than dumping money down a black hole to keep her clunker going.
Yes, it also removed a bunch of used cars that would have been available to other people who could not afford a new one…as the old cars’ engines were filled with cement or something to keep them from ever running again.
One positive aspect of “cash for clunkers” It has decreased the number of “collector” cars and made those that some of us still have – More Valuable.
Cash for clunkers just added $4500 to every new car. A buyer could have bought the same car $4500 cheaper the day before the program was announced. No dealer negotiations.
new things were getting worst when vote was announced
As usual it did more to hurt the lower income people than help, while raising the national debt even higher, which means more taxes for the middle class on up.
My sons became of driving age right as the program ended, making it extremely difficult to find an affordable first vehicle.
Meanwhile, people who really couldn’t afford a new vehicle traded in their “clunkers” & got their new vehicle. With the new vehicle came higher car payments, the inexpensive liability insurance they had on their clunker increased drastically because of required FULL COVERAGE insurance that was many times higher, and then came registration which was also many times higher. They couldn’t afford the vehicle; it got repossessed leaving them with NO vehicle & big damage to their credit.
Many were forced to buy used cars from dealers who deal with these high risk customers, by selling them a used vehicle at 2-4 times book value, usually with no warranty or maybe a 15-30 day warranty & very high interest rates.
The really unlucky ones would have the lenders suing them for difference between what they owed & how much it sold for at auction.
Then we have the people who could afford a new vehicle, bought a clunker to be used as a trade for several times what they paid for it.
The only “good” thing about “Cash for Clunkers” it got rid
of the Obama bumper stickers. Be thankful for little blessings.
Another great example of the truth spoken by Ronald Reagan. Hold on to your wallets tight when you hear these words: “We’re from the government and we’re here to help.”
Rural Postal Workers provide their own cars. Our car had to be towed to the dealer on a flatbed trailer. The car had one forward gear left and the body was trashed! I wish to thank the taxpayers, (us included) for the ability to “trade” our car for a new one which is still delivering mail to this date!
I kept my old clunker, because I couldn’t afford a new one. Meanwhile, I listened to other people, who could afford a new car, bragging about how they used my tax dollars to trade in their older cars for newer gas-guzzlers under the Cash for Clunkers program.
I remember another similar deal around the same time for home appliances. If I remember correctly, you could trade in your old stove, refrigerator, or other large appliance for a new one. I needed a new refrigerator, but the one I was using I had borrowed from a family member, so I couldn’t trade it, and therefore didn’t qualify for that one either.
Most of these government programs that are driving up the national debt seem to only benefit those who know how to play the game, at the expense of the rest of us.
I just turned 65 . When I was licensed to drive, my 1 st car was a “clunker” I bought for peanuts and drove for 2 years . Can’t wait to get rid of this administration and their horrendous record of failures to the american people..
I have heard that it also drove up the price of used cars, and removing those clunkers put many people in a hard place because of the new shortage of affordable beaters. Also, people were not required to buy American cars.
The program was only good for certain newer cars, if bought from participating dealers. Some of the newer cars actually get worse mileage than their trade ins. The ‘clunkers’ were crushed, taken out of circulation, even if they were only a few years old. Many could not afford to get rid of their clunkers, because they could only afford a $1000 car in the first place.
One big benefit, for big brother (not the govt) was the newer cars can be remote controlled via Onstar or similar programs; or tracked with GPS, where the target vehicles usually did not have these ‘features’.
Funny story about Obama’s first failure with the “Cash for Clunkers” program in 09. Well, my story is that I guess I sucked up some of that $3 billion loss because I traded in my old clunker for a $4,500 cash payment to apply toward my purchase of a new car. My dealer had a heck of a time collecting his money from the government – like it took about 3 months to get his money. I was afraid at first that the dealer would dun me for the $4,500 he couldn’t get.