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October 26, 2009

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One major point to note. In an economic environment where individuals and companies are both de-leveraging, the Cash for Clunkers program incentivized individuals to "trade up", thereby taking on more un-neccesary debt at an inoppurtune time. Talk about hypocritical.

Let's not kid ourselves by saying that cash for clunkers was done for environmental reasons. Fact of the matter is, it was a government handout focussed on one industry. Ironically enough, the program helped the foreign car makers more than domestic manufacturers. Funny how the media didn't spin it that way.

Hi James,

Thanks for your comment! I agree, it certainly is a case of targeted demand paid for by taking income from one part of the private sector and giving it to another, wasting millions of dollars in the process. The economy would have been stronger without the program, but try explaining that to folks who see it differently! I've gotten many comments from Europeans who think it's a grand idea!

Sherry

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