Quite A Week for Team Obama

Well all the auto dealerships that have petitioned congress to keep the program going felt that it was helping the ecnomy.

http://www.nytimes.com/2009/07/31/business/31clunkers.html

This article is all about their effort to keep the program alive because it is working.

This is just part of the article.

 

But that's the way stimulus works. You give people money in order infuse it into the economy. The auto industry has been one of the hardest hit by the economy.

Yes money is being given. I wont' argue that it isn't. But that's the whole purpose of a stimulus is to give money.

 

It's a stimulus program - meant to encourage people to spend...that's what it is doing.

 

IMO there are two better alternatives. The first would be as suggested to have buy new cars with much much higher fuel efficiency so that way you can make up the invested energy in the manufacture and transport of the car much faster.

The second would be a program to encourage people to both reduce the amount they drive on their existing cars and better maintain their cars so they can maximize their existing fuel economy. That would bypass the energy investment that is put into the new cars.

The problem with the Cash for Clunkers is that you are either getting too small of a benefit enviromental wise or in many cases have expended more energy than you had before. Consider that if it might take 5 years to make up the invested energy to make the car in the energy savings you are getting from the new car. If you don't get to that point because you decide to buy a new car or don't drive anymore for some reason you have used up more energy than you would have before. As the Cash for Clunkers program has been written I have a very hard time justifying it on the basis of an environmental improvement. The only way I can see that being is if most people purchase cars with at least a much higher efficiency improvement than the 4 MPG and that they get at least 10 years out of those vehicles.

I'm not going to address the economic benefits of the program until I know more but consider this. In a couple of years the CAFE standards will raise average MPG to 27 MPG which will already exceed Cash for Clunkers without having to spend anymore government money.

 

Ok, I am not a big fan of fiscal (as opposed to moneyary) stimulus, but if you are going to do it, why ask people to crush perfectly good working cars? It makes no sense when you look at the environmental impact.

And we already gave a bailout to the auto companies, they don't need another one.

 

Actually, while not really politically feasible, if the original $700B TARP money had been used to buy dead mortgages and raze the houses, it probably would have been substantially more efficient than anything else. You'd help the banks out of their problems by buying up their foreclosed homes, giving them cash and taking them off the books; you'd raise prices of homes by decreasing supply; you'd get rid of the least appealing housing that was the most difficult to sell. When the market gets stronger, it requires rebuilding meaning more jobs, more construction, etc.

Some cities in Michigan are now actually talking about that because their population has dropped so much and the cities can't justify having all that housing. Here's a tiny link about it from Flint, MI:

http://blog.mlive.com/flint-city-beat/2009/07/city_of_flint_awarded_127milli.html

 

Wrong. You're flowing debt into the economy. Debt is what got us into this mess in the first place. Flowing debt into your economy only produces bubbles. It is not healthy for the economy. Some claim we have been in an 7 year recession, but in 2004 we were having a strong economy once again. If you continue to pump domestic debt into the economy, we will have a strong economy again is a couple years, but it will come crashing back down, harder than ever.

I gave you an alternative for cash for clunkers ... pay people to invest 4500 to put solar panels on their homes instead of buying a new car and going into debt.

I have even a better solution. Invest that 3 billion into companies that only export outside this country.

 

SEIU union members were brought in to counter protesters

http://www.youtube.com/watch?v=zTXBOgPCh9w


http://www.youtube.com/watch?v=yjzEPcp3r7U

 

You really can't be this stupid.... I said that the UAW did too good a job getting pay and benefits for their members, and the current employees are now paying the price.

You then essentially say that the UAW sucks, that this is not 1985, this is 2009.... come on man, what the hell.

You agreed with my point.... you instead of either dropping the subject, or admitting that we reached common ground, decided to go off on a tangent and change the point I was discussing with you.

You have your opinions, some of them are valid, and other ones... well, your attitude is essentially "they are true because I say so".

If you want to rip Obama, it isnt hard, but your level of bias is high, you are no better than the TEAM OBAMA cronies that think the man walks on water.

 

Not all debt is bad, though. The primary problem was that the debt was being used to purchase homes that weren't really worth the amount of debt that was being accumulated. Cars aren't necessarily good debt, but they don't have that problem of creating a debt bubble within themselves because car prices don't inflate the same way.

That program actually already exists. You get a 30% tax credit for installation of solar panelling. So if you buy $15,000 in solar panels, you'll get $4500.

 

That is the American way.... by the way, this plan is terrible for poor people. Used cars will be even more expensive now. It is a long term marginal benefit to fuel economy in my opinion.

Team Obama is like everyone else is politics, taking YOUR money

 

So what, the auto industry has been babied too many times... sink or swim.

 

The used car market is actually cheaper now, because new cars are cheaper and demand has shifted that way. As Langford pointed out, it has hurt the used car dealers for exactly that reason. For the past many months, the used car market had been the beneficiary of the slow economy - people were buying them instead of new cars, reducing the deals the people could get on used cars.

So, right or wrong, this actually makes used cars cheaper for the poor.

 

You make a valid point, and have data to back up your opinion. All I have is my gut, if there are fewer quality used cars (they are being destroyed), I think there will be a bubble effect for awhile. But... I could be wrong

 

Do what? C4C went into effect how long ago? And you think this is already affecting the used car market? The only reason why used cars might be cheaper now is because dealers are trying to get them off their lots, not because c4c.

You're just making up nonsense crap now.

 

I don't know, both sides were claiming they were attacked first.

 

You have to have deficit stimulus to get out of depression or near depression conditions. It worked for the great depression, and not doing it correctly is what screwed Japan up.

The $4500 dollars for solar panels would be fine as well. Both would be worthwhile simuli to the economy

 

Thank you for a great response complete with alternatives.

I agree that buying 40 mpg cars would be better, but there isn't really enough of a surplus out there to make that the cut off for this program.

Secondly, 5 years for driving a car isn't really all that much, and would be quite common I would think. I don't know of any studies to back this up, so I admit it's only a guess on my part.

But since new cars have to have energy used to deliver and manufacture them no matter what, then let's get the more efficient ones on the road, and the less efficient ones off.

 

I heard some car dealers are raising the prices in anticipation for the 2nd round of cash for clunkers.

Despite its initial stimulative successes, I doubt this is a sustainable and viable means of getting people to spend money.