Friday, September 11, 2009
Cash For Clunkers An Abysmal Failure
And a Huge Cost To Taxpayers
And Hurt Charities As Well
Presidential Math: Cash for Clunkers Spent $3 Billion to Save $375 Million
Today, Americans for Tax Reform (ATR) released calculations that show the economic failure of the “Cash for Clunkers” government sponsored program.
ATR President Grover Norquist said, “This is nothing more than the President using the guise of ‘green energy’ to cover-up yet another massive multi-billion dollar spending project. When are these people going to learn throwing money at the economy is not the answer?”
The analysis on the “Cash for Clunkers” program is below and can also be found on the web at www.atr.org.
o A “clunker” that gets 15mpg and travels 12,000 miles per year, consumes 800 gallons of gasoline per year
o A new “fuel-efficient” vehicle that gets 25mpg and travels 12,000 miles per year, consumes 480 gallons of gasoline per year
o The average clunker transaction reduces US gasoline consumption by 320 gallons/year
o With 700,000 vehicles participating in this program, that’s 224 million gallons/year saved because of this program – roughly 5 million barrels of oil/year
o 5 million barrels costs about $375 million at $75/barrel
o The “Cash for Clunkers” costs $3 billion
Congratulations President Obama, Speaker Pelosi and Leader Reid – you spent $3 billion of taxpayer money to save $375 million!
And did you know that Cash for Clunkers hurt both charities and the working poor as well? Townhall:
Mission Solano, a homeless charity based in Fairfield, California, reported that it’s concerned the Cash for Clunkers program could hurt their organization. For years taxpayers have donated their old cars to charities and received a tax deduction. Charities such as Mission Solano then sell the donated cars on charitable car lots that generate income to fund their work. It’s a win-win for both the taxpayer and the charities—and those aided by the charities.
Mission Solano’s executive director Ron Marlette described their concern: “It is too early to know how much we will be hurt by the Cash for Clunkers program, but we know we can’t compete with the government's checkbook. Our donations were already down due to the economy as people are driving their old cars longer or brokering a sale themselves. The Cash for Clunkers program could shut us down.”
In addition to selling cars to finance their assisting of the homeless or needy, organizations like Mission Solano also helps those who can’t afford to purchase new cars. Marlette explained, “We often sell our cars to individuals who cannot afford anything else. In some cases these are men and women who have been helped off the streets by the Mission. Now they have a job and need cheap wheels to get there. They can’t buy a new car. What are they supposed to do?”
In fact, the Cash for Clunkers program is wiping out an entire market of used cars purchasers. The teenage boy who mows lawns all summer long won’t be able to find an old clunker to purchase because the government intends to destroy or render useless the cars acquired through Cash for Clunkers. There are even reports that used car lot owners are finding it increasingly difficult to obtain older cars at auctions. With fewer older cars, prices are bid much higher, decreasing the profitability for used car lots and increasing prices for buyers.
While the Cash for Clunkers program may further the lofty government goal of saving the environment and stimulating a weak economy, its actions are hurting the vulnerable and poor. How sickeningly ironic that too often the government programs heralded as compassionate to the underprivileged end up hurting the very people they are designed to assist.
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