Cash for Clunkers Program: Obvious Government Not Prepared
Posted: Friday, July 31, 2009
by Asher Ricard
The Cash for Clunkers Program has been in the news all month as consumers fight to actually "cash in" on the governments latest plan to bail out the suffering auto industry.
It has amused me over the last few weeks to watch the ill prepared chaos surrounding this program.
This week news is the cherry on top of a quickly melting sundae. The government is running out of money. Does this really surprise anyone? Planning ahead is not a characteristic of the US government and it looks like it is going to bite them in the you know what again.
Hey, let's pay people to buy cars!
That would solve the problem of the auto industry going bankrupt and make us look like good people. Instead of giving money straight to the automobile giants, we will give it to the people. They will think they are getting something and be happy with us. Then they will turn around and give it back! This is a brilliant plan.
What they forgot to mention is that all of this is your tax money in the first place. I am not sure if I even have a complaint about that since at least we are getting some of our money back.
Then the dealerships get excited because they have free money coming in from the government. They decide to double the offer. Does anyone remember where this money is from? It is yours to begin with. Got to love marketing.
Here is the clencher: As Americans we buy in and get excited about the program. Every body has the right response and does exactly what they are supposed to do. Dealers get aboard and offer other enticing incentives. Americans flock to dealerships to cash in.
Is the government prepared? No
They have a computer that is just as old as the cars being traded in to process dealership requests. Therefore, while it looks like there is plenty of fund to satisfy requests, there are endless amount of people not even able to get in to the computer process.
Then the government admits today they do not have the money for the program. The $1 billion set aside is already gone.
Does this surprise anyone? We got in this situation financially because of lack of planning. Would this program be any different?
The government offers bailouts, but fail to stipulate where the money should be spent. They pass initiatives but fail to stipulate how those will be carried out or funded. Did we honestly expect anything different from the government now?
The government will rush today to add more money to the cash for clunkers program. Not sure where they will get the money, but the House is planning on going on vacation so I am sure it will be passed.
Cash for Clunkers is the poster child for the government right now. Good ideas, but not planning on follow through ever. Kudos to the government for yet one more program that causes more headaches then some might feel it is worth!
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Top-level comments on this article: (1 total)thanks, i dont have time to follow this story but I'm glad you summed it up with clarity - and well needed criticism.
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