Might be too little, too late for Detroit, but it is a neat idea anyhow. That is, if you think we need more cars on the road.
Members of the U.S. Congress are working on a new bill to provide incentives for drivers to trade in older vehicles for newer, more fuel-efficient cars, hoping that the recent success of a program in Germany will give the program new momentum, a House Democratic aide said Tuesday.The so-called "Cash for Clunkers" program is currently being drafted in Congress, the aide said. A similar proposal gained some momentum in Congress earlier this year but ultimately didn't get the green light from Congress.
We're betting this one will get the green light, so to speak. But should it? For a country so suddenly green conscious, it seems that we are awfully anxious to start subsidizing automobile ownership. Improving the "national fleet" EPA by 10% (which seems a difficult goal) would be rather expensive, and of limited utility in the end. Surely someone has done the "remaining years in lifetime" v. "fuel savings over life of new car" calculation somewhere, but I'm curious to know where the break-even numbers are.
US Lawmakers Drafting 'Cash For Clunkers' Auto Bill - Aide [The Wall Street Journal]
Posted by guest , Mar 17, 2009 3:25PM
The idea isn't to put more cars on the road. The idea is to trade in grandma's '87 Buick that gets 12mpg and drips motor oil with a more fuel efficient model, and sending the old clunker to the scrap yard.
Is it economically efficient? Probably not. But I think that stopped mattering about 5 months ago...
Posted by guest , Mar 17, 2009 3:31PM
@1 - Yea, because that's the way to get out of an economic crisis...pursue ideas that are, as you say, probably not economically efficient.
Really?
Posted by guest , Mar 17, 2009 3:34PM
1 here... not saying I agree with that, just making the observation about Congress' apparent thinking.
Posted by guest , Mar 17, 2009 3:36PM
Other countries are doing it. Time for the USA to play catch up. Only here the executives will get bonuses.
Posted by guest , Mar 17, 2009 3:37PM
Who moved my Bonus?
Posted by guest , Mar 17, 2009 3:38PM
Meanwhile in a parallel universe unknown the Congress -
http://www.chicagotribune.com/business/chi-biz-hybrid-sales-march16,0,5173041.story
Wasn't GM counting on the Volt for its revival?
Posted by guest , Mar 17, 2009 3:40PM
This will soon become the green light district where wheatgrass, tofu, and vegans rule the world.
...ugh.
Posted by guest , Mar 17, 2009 3:40PM
It would be more efficient to buy the clunkers straight off the UAW assembly lines.
Posted by merkin capital partners , Mar 17, 2009 3:51PM
I recently traded in my older car, but I went with an SUV that as of the guage this morning is getting 14.0 mpg. Just trying to do my part.
Posted by NAS Keflavik boi , Mar 17, 2009 4:14PM
Oh this is awesome for a shadetree mechanic fucktard like me -- I have about 3 (not sure if the half-a-vega counts) old hoopties on my lot in Suffolk - if Uncle Obama is going to pay me better than scrap I will happily wheel them in to the car czar or whoever.
This shit is REALLY getting bizzarro-world, kiddies. Talk about buying toxic assets - you don't wanna see inside the valve covers of my 383 CID Plymouth Fury -- the sludge is the only thing keeping an oil slick from forming on the Great South Bay when I fire up that Mopar...
Posted by guest , Mar 17, 2009 4:30PM
As soon as they pull my grandmother's license, I'm taking her '87 Buick Grand National. I've had dibs on it since she bought it new.
Posted by guest , Mar 17, 2009 5:13PM
Given that many Americans are living in their cars, this is actually a great idea. Stimulate the auto sector while improving living conditions for millions.
Posted by guest , Mar 17, 2009 5:36PM
Coming soon: the administration introduces a new program to break windows to stimulate the glazing industry.
I'm glad that this country is waking up to the possibility of creating wealth through asset destruction.
Posted by guest , Mar 17, 2009 6:17PM
How else are we going to move all the inventory?
Seems like a good idea to me.
*The people get newer cars.
*GM, Ford, and Chrysler don't need as much in direct bailout.
*More people keep their jobs.
*Less polution.
I like that they are looking for win/win solutions to balance out the bailouts. With moral hazard, rule of law and rational fairness already throw to the window, why not?
Once you run some numbers and prove this is a bad idea I might listen, but, EP, you continue to prove yourself completely intellectual inflexibile to the point you don't really analyze anything. You just snark about whatever you can find from the desk of your computer.
I'm disappointed that your experience as a lawyer or in private equity has reduced you to a sorry shell of a human being. You are more than willing to shill about the sanctity of contracts for AIG bonus payments and the extreme importance of Federal Reserve opacity but become angry when hard working Americans are offered help to buy a new car.
It must be very interesting what goes on in your sociopathic mind. For a while, I hated you. Now, I have only pity. You hide behind your "education" but at the end of the day, you don't *really* know or care what you are talking about. A jack of all trades but master of none.
Posted by guest , Mar 17, 2009 6:34PM
When Obama is willing to give up his 8 mpg Caddy, not to mention exchanging "his" two 747's for a pair of GVs, I will happily trade in my Oldsmobuick for a Chevy Dolt, but until then I am keeping this piece of pure American glory in the front yard, on concrete blocks, where it belongs.
Posted by guest , Mar 17, 2009 6:37PM
Jesus Christmas 14, what crawled up in your ass and died today?
Posted by guest , Mar 17, 2009 7:00PM
Leave Equity Private ALONE!
Posted by guest , Mar 17, 2009 8:27PM
Can I trade my normal BMW for a 500 bhp M BMW? Do I get a rebate from the govt?
Posted by guest , Mar 18, 2009 12:21AM
@18
Yeah, it's like can I trade in my custom Maybach that has jets wielded to the rear fenders (gold) and sold plats 45' BOSS rims?
I was just going to drive it off a cliff (cause it's so next year and I stay 3 years out), but if that skinny muslim/uncle obammy/Hussein is going to be so stupid to give me something for it, well, the jokes on him (her?) AmIrItE
FUCK ME RUNNING I'M RICH AS FUCK
Posted by stimpy tec , Mar 18, 2009 3:17AM
How C4C will affect the composition of your atmospheric portfolio:
"Cash for Clunkers [yields] significant emission reductions per government dollar
spent, 1.1 million ... annually per billion
government dollars... Yet Cash for Clunkers is a one-off policy intervention, with diminishing climate returns over time." (page 5)
http://www.wri.org/publication/green-global-recovery
Posted by guest , Mar 18, 2009 8:56AM
@14 I don't know where you're expertise is in, I'm more interested in knowing what you're smoking anyway, but please try connecting neurons.
This measure just shortens the replacement cycle of vehicles which is bad as producing a new vehicle is not environmentally friendly compared with driving an old car. Second, no new demand created. The cliff comes later, that's all. Leasing uses the same idea btw.
It would be a win/win situation if socialism works. Or do you want to maximise win/win by thrashing cars after say one year of use to replace with new ones funded by the govt? And why only cars? Houses, TVs, dishwashers... Works for sure. Works even better on a daily cycle.