Cash for Clunkers: wild success or miserable failure?
Cash for Clunkers has been the most successful program in the history of civilization. Cash for Clunkers has been a boondoggle -- a prime example of government run amok.
It all depends who you ask. It's amazing that we hear those two statements constantly, presented all the time, with no one trying to reconcile them.
So let's take a fair look at the program, which was a strange mix of policies ranging from environmental to economic.
First, let's probe the economic goals of the program. The program was designed to entice people to trade in their vehicles and buy new cars. In that regard, it was successful. A lot of people did that. But would those people have been buying anyway?
The program certainly excluded a large segment of the population that doesn't and won't buy cars new, but rather buy used.
Another problem with the economic angle is that American car makers weren't the only to benefit. In fact, the USA Today reported that more than half of the cars bought through the program were foreign brands.
Second, let's explore the environmental aspect. Talking about trading in an old clunker for, say, a hybrid vehicle or at least an energy efficient one sounds like a good plan. But did it happen? From the beginning, the program's requirements for increased fuel efficiency -- in some cases as low as 1-2 miles per gallon -- hardly made a dent.
And aren't we simply rewarding people who had driven fuel inefficient cars? Those who made the switch long ago are now paying those who didn't.
So is it a success or failure? For an answer, we need to compare the Cash for Clunkers period with what preceded it. The reality was the American car makers were stuck in a loop of burning cash and requesting more from Congress, with no end in sight.
If the program accomplished anything, it allowed the car makers, now emerging from bankruptcy, to gain a little breathing room to figure out a new plan. It helped bring people back to area car lots, which was a positive.
For the price, this was not the miracle many people hoped for. But was it a success? On balance, it seems like a mild one.