Federal stimulus money in the face of a recession is always about clogging the drain with cash. C4C was a quickly thrown together approach that on the surface looks like a win/win but of course is always open to criticism. Until all the analysis is in on jobs secured, and tax income (sales tax, income tax for workers and executives, franchise taxes for dealers and manufacturers etc etc. You can't really call it more than a feel good plan but... what is the value of the psychological effect? Turning the moribund financial news around with a little frenzied buying? It's hard to estimate but it did have value that extends way beyond just cars.
that shouldnt be relevant. im a tax-paying amer'can too! why is an autoworkers right to job security more valid than mine?
thats not really a question. but i guess all i can say is that i wouldnt be too happy about it, but i would recognize that its part of the natural ebb and flow of the economy and as a matter of principle im against the government intervening, especially w/ our debt already where it is. i understand that bush and republicans are the ones who have gotten us to where we are, but imo obama is compounding the problem (long-term). what percentage of purchases that happened in 3Q would have happened in 4Q? sounds like a significant amount - it seems like we gave the 3Q an artificial boost at the expense of 4Q #'s. in that respect one quarter is cannibalizing the other.
wasnt aware of it. my agent was good so i hate to think that if the option was there i wouldnt have been notified of it. of course, you get hit w/ so much new info when buying your first house - it might have been discussed and decided that it wasnt the way to go for me. i did that bank of america 'no fee/no closing costs' mortgage, which im pretty happy with. you pay a higher apr, but saving those few thousands upfront is nice.
where the heck did that $4k come from in the first place? you are talking like it just comes out of nowhere. someone has to cover for that $4k. i think the free market should have made that decision. furthermore, it sounds like it didnt make much of a difference. even a stopped clock is right twice a day.
i should add that in the grand scheme of things, all these rebates and tax credits are a drop in the bucket when you consider that bush and obama gave away about 30 trillion in bail-outs. this stuff we are talking about is pocket change. at least it is directly going back to the people in terms of cars and homes - IF they are going to drive our country further into debt at least do it in the name of the people rather than a bunch of corporations whose own greed and malfeasance got them to where they were in the first place. ill take socialism over fascism any day. also, ive heard that the bush/obama bail-outs could have paid off every single mortgage in the country AND provided full health insurance to ALL and there still would have been several trillion left - just goes to show who our elected officials are really looking out for.
Remember, the 565,000 people that were not counted in this ridiculous statistic were not counted because they were going to buy a car anyway. So, even if I were to grant that levering up their debt was bad (which I wouldn't grant), they were going to do that anyway. Plus, the government dampened the debt they would have taken. If you want to complain about incentives for levering up, target the 125,000 that would not have otherwise bought -- the 125,000 that the article implies are the only "good" to come from this program. And even still, whether levering up on debt is good or bad or would or would not have happened -- all that is not even relevant to the fallacy of suggesting the govt. paid $24k per car. The article wants to imply that the only impact of the $3B in spending is an additional 125k cars sold. That is obviously and ridiculously untrue, regardless of any balance sheet implication. Btw, I apologize for the personal slight, which wasn't very classy. If I ended up baiting you with it, I'm sorry. The atmosphere of the BBS will occasionally seduce me despite my best efforts. Still, believe that this article is indefensible; even if C4C was terrible, this article was worse.
It was borrowed from our children, of course. But, that money will still have an effect when it is used (and another, when it is repaid ). And, it could be worthwhile if the benefit we derive now is greater than the cost of borrowing it. I have no comment on whether the benefit was great enough. Maybe. I'm just listing it as a benefit derived from the money spent. I'm not saying it was appropriate or big, just that it exists -- and was ignored by the article you posted. I'm sure bigtexxx is right about some things. This just isn't one of them.
I'm guessing they didn't strengthen the efficiency rules because no one really wants a crappy American car that could qualify with it.
Socialism eventually leads in to fascism. Maybe not today or tomorrow, but eventually. I'll take corporate fascism over government fascism for my generations to come. The money is not going back into the people. It is indirectly going back into the car and financial industry, which both have already received bailouts. On the consumer end, there was only one group of winners. This group consisted of people who 1) were already in the market for a new car and 2) who's value of their existing automobile was less than the 3500/4500 credit. I have a feeling this group was pretty small. If a consumer did not meet those two criteria, then all they were doing was going further into debt to buy a new vastly depreciating liability. Instead of having 2 years on their debt, they now have 5. Its a fallacy that you must have a car payment every month. Many criticized Bushes $400 tax cut a failure because many people saved it. If consumers would start saving money, live well in their means, stop purchasing cars every 2 years and live in a house that they can afford, this recession would not be nearly as bad. The housing bubble would not have been so big, thus properties would not have been so expensive, thus people would not have been in foreclosure after the first paycheck was missed. The C4C program was just the same. People seen the 4500, found it as an excuse to get something bigger and better.