Smiling JOe
SoWal Expert
That is chump change for the Federal $$$ printers. I just hope they switch to hemp paper before we run out of trees.
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clunkers program done already?
- Thread starter Bob
- Start date
Blair
Beach Fanatic
scooterbug44
SoWal Expert
I think the trees are safe - seeing as how our money is a cotton/linen blend w/ colored silk threads added as an anti-counterfitting measure, not paper.
30A Skunkape
Skunky
I think the trees are safe - seeing as how our money is a cotton/linen blend w/ colored silk threads added as an anti-counterfitting measure, not paper.
Imported from, and basically owned by the Chinese
Again, think of the consumer debt $2 billion guarantees-assuming everyone gets $4500, that works out to something like 444,400 cars. Assuming (conservatively) that the average price John Q. Consumer is left with for his new car is $15,000, this program is saddling our economy with $6,666,660,000 consumer debt (before interest). I am no math major, so someone can number check, and I am no economist, but this really does not sound like a great idea considering how enamored we have demonstrated ourselves to be at living beyond our means.
mtlinscomb
Beach Fanatic
Smiling JOe
SoWal Expert
I guess all of the non-profits needing used cars are sheITE out of luck for getting donated vehicles.
Miss Kitty
Meow
Wow...good point.
So, I have a burning blow up question. On this list of clunkers, would it be possible for someone with a really really inefficient auto to find another car on the clunker list that would qualify for this program? Or, does it have to be a brand new car? What is happening to all the used car lots? Sorry, that was two questions. ;-)
Vandal Economics
Yes, it has to be a brand new car. I am against this program. You might find the following article interesting.
Vandal Economics
by Bill Bonner
Ouzilly, France
"In keeping with the requirement that old engines be destroyed,
mechanics across the country poured sodium silicate into crankcases and
revved engines, causing mass car death," says an article in Harper's
Weekly.
"'It just don't make sense,' said a used-car-parts salesman in Dayton,
Ohio. In Glenview, Illinois, mechanics watched a blue 1994 Chevy Lumina
van wheeze and choke for five minutes before stopping. 'That's a good
American GM product,' said service manager Mark Rolla, 'that won't
die.'"
Let's open up the hood and take a better look. Does 'Cash for
Clunkers' really work, we ask? In answer, we guffaw. Then, we
invite dead economists to guffaw with us.
Richard von Strigl, among others, pointed out in 1923 that there is a
big gap between real economics and the vulgar economics that drives
policy decisions. On the one hand, serious observers study what happens
in a pure, natural economy and draw their truths from its crystal
streams. On the other, the meddlers distort the economic world so much
that the observations of the old economists hardly matter. Downstream
from the meddlers' camp the water is not even fit to drink.
In theory as well as in fact, the planners never know what they are
doing:
"The...knowledge of the circumstances of which we must make use never
exists in concentrated or integrated form," began Friedrich Hayek in
1945, "but solely as the dispersed bits of incomplete and frequently
contradictory knowledge which all the separate individuals possess."
A "good" is a good only insofar as it is good to the person who wants
it. The public servant - as able and self-less as he may be - has to
guess. History and theory tell us what happens; he usually guesses
wrong. Only the individual knows what he wants and how to get it. He
compares one good against others - using prices to guide him to where
he gets the most good for his money. But when the government steps in
with its subsidies, it effectively pisses in the stream of price
information. Now, the consumer, with no clean signal to guide
him, makes mistakes. He may be lured to buy a new car. The
central planners may be pleased. They see the effect they desired -
more auto sales. But what don't they see? We invite Frederic Bastiat
for an opinion (1850):
"Between a good and a bad economist this constitutes the whole
difference - the one takes account of the visible effect; the other
takes account both of the effects which are seen, and also of those
which it is necessary to foresee. Now this difference is enormous, for
it almost always happens that when the immediate consequence is
favorable, the ultimate consequences are fatal, and the converse."
But who listens to Bastiat or Hayek? Ten countries have taken up 'Cash
for Clunkers' programs. In Britain, the government puts up 2000 pounds
to grease the deal...with a total of 300 million earmarked for the
program. In America, the 'Cash for Clunkers' program was extended last
week, giving buyers a bonus of $3,500 or $4,500 when they turn in an
old vehicle. In France, buyers get 1,000 euros toward the purchase of a
new car. Everywhere, the program is hailed as a success. It is
widely thought not only to boost auto sales, but to help revive the
economy, reduce pollution, cut oil imports and even lower highway
deaths. We haven't heard that buying a new car contributes to
weight loss, but we haven't seen the TV news. Even 'free market
capitalists' such as Larry Kudlow say they like it:
"The Cash-for-Clunkers rebate program is working. ...And the price tag
of the program is a mere $2 billion compared with the trillions of
dollars Washington has been wasting. So, for once in our lives,
Washington spending is giving us a good bang for the buck."
Bastiat knew better. He described a scene where a boy had broken a shop
window. The store's owner was annoyed, until a foolish economist
pointed out that the broken window was a blessing in disguise. It gave
work to the glaziers and glassmakers. The glaziers then could buy other
things...and thus did the whole economy enjoy a bounty from this single
act of vandalism.
But wait, Bastiat wanted to know, if you could improve the lot of
mankind by breaking windows, why not smash every window in Paris? And
if you could improve the lot of mankind circa 2009 by crushing cars,
why crush them all? And knock down London and New York too.
Think of the boom that would accompany the rebuilding!
Obviously, it doesn't work that way. Replacing broken windows, or
crushed cars, takes resources away from some other uses. This unseen
effect is actually greater than the seen effect - the improved market
for new cars. Lured by phony price information, buyers send phony
signals to the rest of the economy. The automakers produce more cars
than they need. Steel, which might have gone to refrigerators is used
for car doors. Oil, which might have been used to generate electricity,
is used to stamp out fenders.
Savings, that might have been invested in new industries, go to
prop up an old one. Kudlow allows himself a peek at the unseen
consequences: "...yes, it's quite possible that government rebates
today will steal car sales from next year. But let's cross that bridge
next year..." Then, he even wonders, briefly, at the obvious
foolishness of it...almost as though he were a serious thinker: 'Well,
why not just spend another $100 billion and give consumers checks for
everything?' Or, 'Why not spend another trillion?' Well, I don't want
to go there..."
No one wants to go there. The old economists shake their heads: 'It's a
fraud,' they say. The rest of them don't give a damn.
Enjoy your weekend,
Bill Bonner
The Daily Reckoning
Yes, it has to be a brand new car. I am against this program. You might find the following article interesting.
Vandal Economics
by Bill Bonner
Ouzilly, France
"In keeping with the requirement that old engines be destroyed,
mechanics across the country poured sodium silicate into crankcases and
revved engines, causing mass car death," says an article in Harper's
Weekly.
"'It just don't make sense,' said a used-car-parts salesman in Dayton,
Ohio. In Glenview, Illinois, mechanics watched a blue 1994 Chevy Lumina
van wheeze and choke for five minutes before stopping. 'That's a good
American GM product,' said service manager Mark Rolla, 'that won't
die.'"
Let's open up the hood and take a better look. Does 'Cash for
Clunkers' really work, we ask? In answer, we guffaw. Then, we
invite dead economists to guffaw with us.
Richard von Strigl, among others, pointed out in 1923 that there is a
big gap between real economics and the vulgar economics that drives
policy decisions. On the one hand, serious observers study what happens
in a pure, natural economy and draw their truths from its crystal
streams. On the other, the meddlers distort the economic world so much
that the observations of the old economists hardly matter. Downstream
from the meddlers' camp the water is not even fit to drink.
In theory as well as in fact, the planners never know what they are
doing:
"The...knowledge of the circumstances of which we must make use never
exists in concentrated or integrated form," began Friedrich Hayek in
1945, "but solely as the dispersed bits of incomplete and frequently
contradictory knowledge which all the separate individuals possess."
A "good" is a good only insofar as it is good to the person who wants
it. The public servant - as able and self-less as he may be - has to
guess. History and theory tell us what happens; he usually guesses
wrong. Only the individual knows what he wants and how to get it. He
compares one good against others - using prices to guide him to where
he gets the most good for his money. But when the government steps in
with its subsidies, it effectively pisses in the stream of price
information. Now, the consumer, with no clean signal to guide
him, makes mistakes. He may be lured to buy a new car. The
central planners may be pleased. They see the effect they desired -
more auto sales. But what don't they see? We invite Frederic Bastiat
for an opinion (1850):
"Between a good and a bad economist this constitutes the whole
difference - the one takes account of the visible effect; the other
takes account both of the effects which are seen, and also of those
which it is necessary to foresee. Now this difference is enormous, for
it almost always happens that when the immediate consequence is
favorable, the ultimate consequences are fatal, and the converse."
But who listens to Bastiat or Hayek? Ten countries have taken up 'Cash
for Clunkers' programs. In Britain, the government puts up 2000 pounds
to grease the deal...with a total of 300 million earmarked for the
program. In America, the 'Cash for Clunkers' program was extended last
week, giving buyers a bonus of $3,500 or $4,500 when they turn in an
old vehicle. In France, buyers get 1,000 euros toward the purchase of a
new car. Everywhere, the program is hailed as a success. It is
widely thought not only to boost auto sales, but to help revive the
economy, reduce pollution, cut oil imports and even lower highway
deaths. We haven't heard that buying a new car contributes to
weight loss, but we haven't seen the TV news. Even 'free market
capitalists' such as Larry Kudlow say they like it:
"The Cash-for-Clunkers rebate program is working. ...And the price tag
of the program is a mere $2 billion compared with the trillions of
dollars Washington has been wasting. So, for once in our lives,
Washington spending is giving us a good bang for the buck."
Bastiat knew better. He described a scene where a boy had broken a shop
window. The store's owner was annoyed, until a foolish economist
pointed out that the broken window was a blessing in disguise. It gave
work to the glaziers and glassmakers. The glaziers then could buy other
things...and thus did the whole economy enjoy a bounty from this single
act of vandalism.
But wait, Bastiat wanted to know, if you could improve the lot of
mankind by breaking windows, why not smash every window in Paris? And
if you could improve the lot of mankind circa 2009 by crushing cars,
why crush them all? And knock down London and New York too.
Think of the boom that would accompany the rebuilding!
Obviously, it doesn't work that way. Replacing broken windows, or
crushed cars, takes resources away from some other uses. This unseen
effect is actually greater than the seen effect - the improved market
for new cars. Lured by phony price information, buyers send phony
signals to the rest of the economy. The automakers produce more cars
than they need. Steel, which might have gone to refrigerators is used
for car doors. Oil, which might have been used to generate electricity,
is used to stamp out fenders.
Savings, that might have been invested in new industries, go to
prop up an old one. Kudlow allows himself a peek at the unseen
consequences: "...yes, it's quite possible that government rebates
today will steal car sales from next year. But let's cross that bridge
next year..." Then, he even wonders, briefly, at the obvious
foolishness of it...almost as though he were a serious thinker: 'Well,
why not just spend another $100 billion and give consumers checks for
everything?' Or, 'Why not spend another trillion?' Well, I don't want
to go there..."
No one wants to go there. The old economists shake their heads: 'It's a
fraud,' they say. The rest of them don't give a damn.
Enjoy your weekend,
Bill Bonner
The Daily Reckoning
