Cash for Clunkers: Support the Success

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The Senate will be voting in the next few days in favor of adding an additional $2 billion to the CARS rebate program, commonly known as Cash for Clunkers. “In about six days, it is estimated that 250,000 cars were sold. On both sides of the aisle, people acknowledged the effectiveness of this initiative. And that is why yesterday, as we were seeing what was happening this week, the Obama Administration asked us to help consumers who have yet to have the opportunity to take advantage of trading in their old cars for new energy efficient models.” (Nancy Pelosi).

The CARS rebate program has been a tremendous and unquestionable success and should be sustained. The program has spurred car sales and is a one of the few bright spots in an otherwise pathetic and wasteful attempt to revitalize the economy. But this article is not about the failures; this is all about the success that is CARS.

People have been flooding dealerships looking for $4500 in rebates. The vehicles being traded in have a reported average of 15.8 miles per gallon, while the vehicles that have been purchased get a reported average of 25.4 miles per gallon. This far exceeds the 18 MPG requirement for trades and 22 MPG requirement for the new vehicles.

For those of you who are misguided enough to believe that this will not be helping the environment or our economy, you will need to take a moment to think things through. If Joe America is now getting an extra 9.6 miles per gallon (25.4 minus 15.8), and he uses 20 gallons of fuel a week, that is a savings of 10,400 miles per year, 409 gallons and a little over $1,000 saved per year at $2.50 a gallon.

So far we have about 250,000 cars that have been sold and that is a savings of $255,625,000 per year. That is strictly in monetary terms. Pollution will also be cut as long as people do not drive more now that their vehicles are more efficient. This is a legitimate concern as people drive more when gas is cheap and their vehicles are efficient.

This brings me to my next point. The United States would be wise to increase the gas tax to keep gas at a price closer to the $4.00 a gallon range. This would have the largest impact on our war against our fuel addiction. This is and will not be a popular move, but it may happen.

Here are some of my favorite arguments against the CARS rebate program. These arguments were made in January when the bill was originally being proposed.

Note- most of these arguments are lame, but represent the opposing sides point of view. They are from the libertarian site, The Daily Paul. The Daily Paul is created and paid for by Michael A. Nystrom and not affiliated with Ron Paul in anyway Except that Michael and Ron are both libertarian and ardently pro-Ron Paul.

This is where these arguments come from: http://www.dailypaul.com/node/77405

-“Owners who turn in vehicles for crushing would receive a “minimal” payment to purchase a new car. This is a misguided attempt to spur car sales and claim that the country’s air quality or fleet fuel mileage is being improved.”

I am not sure who would consider $3500 – $4500 a minimal amount of money. The average American household has an income of about $50,233. $4500 is almost ten percent of the average income for a household.

-“Cash for Clunkers” programs threaten enthusiasts nationwide with the loss of valuable parts and parts-cars for repair, restoration, and customization projects. The programs also risk destroying classic, historic and special-interest vehicles, our American heritage.”

This is a great point. That is why I am supporting the forced use of the Model T among all Americans. No longer will our heritage and our classic cars be threatened by these “new” vehicles. This would be a legitimate concern except that the CARS act specifies that a vehicle that is made in 1984 or older does not qualify. The 1986 Plymouth Gran Fury enthusiasts might be a little upset about this, but they need to think about the greater good.

-“Cars turned in for scrappage often barely run, or are rarely-driven second or third vehicles that have a minimal impact on overall fuel economy or emissions.”

The trade has to be in drivable condition.

-“Cash for Clunkers” ignores better policy options. If Congress wants to act, support for repair and upgrade is a better choice and a win-win for consumers, dealers, manufacturers and repair shops. Significant emissions and fuel economy improvements can be achieved in older vehicles through relatively simple and inexpensive means: repaired/replaced exhaust systems, tune-ups, etc.”

Note: The trade in vehicle must have a “new” combined city/highway fuel economy of 18 miles per gallon or less. Yes, “significant emissions and fuel economy improvements can be achieved in older vehicles.” But, these vehicles were not fuel efficient when they were new. The purpose of the program is to get these inefficient vehicles off the road.

The CARS rebate program is a success and it needs to be continued so that its impact can be fully realized.  (Here are some links to check out)

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