Autocide
For those of you who haven't heard of the federal "cash for clunkers" program, here's a quick rundown. You trade in an old car for a new one that gets better gas mileage and you get up to $4,500 (the amount depends on the mpg difference between the old and the new car and the type of car involved) from Uncle Sam. The program burned through its billion dollar funding in the first weekend, so congress allotted additional funding to keep it alive a bit longer.None of this was too surprising to me with all of the stimulation in the air, but what did surprise me a bit was what the dealerships are required to do with the "clunkers." Sodium silicate is poured into the engine block, the car is started up, and the heat causes the solution to solidify to a glass-like substance. This assures that these dreaded gas guzzlers will never see the road again.
Keep in mind that some of these cars are only a few years old. You could trade in a car that gets 30 mpg for one that gets 40 mpg and qualify for the full rebate. I'm all for higher efficiency in the future as I see curtailing the depletion of natural resources as a very important cause, but I wonder if we're saving energy/resources by discarding functional goods (cars, light bulbs, or whatever).
Let's crunch a few numbers. Say you trade in a 20 mpg vehicle for one that gets 30 mpg. Say you drive this car 15,000 miles a year. With the 20 mpg car, that would take 750 gallons compared to only 500 gallons for the 30 mpg car. At $3 a gallon, the 250 gallons you didn't use saved you $750. Not until the 7th year of ownership does the government come out ahead of just paying you the difference in your fuel costs (and for non passenger cars the net mpg gain requirements are even less, so the yearly saving could be half as much in some cases).
Now some would say it's not about the money, it's about lower pollution/greenhouse gasses, etc. Lowering air pollution in congested cities would be a plus, but I'm not sure we come out ahead on carbon emissions. I don't have hard data on this, but I'm guessing that a lot of energy (and hence CO2 emissions) goes into making a car. Would using a more efficient car make up for the energy that you basically used to make an extra car? It would depend on a number of variables, including how long your old car would've lasted and how long you use your new car. But in a few years you might trade it in for an even more efficient one. My guess is that we're not getting ahead with this game.
Comments
I agree with you on the emissions part, though. To determine the impact on the economy, we should consider how much CO2 is exhausted in the manufacturing of these cars. By artificially increasing demand for new cars, we could actually be creating a net increase in emissions. In fact, I've read somewhere that the life cycle of a hybrid car actually produces more CO2 emission than the life cycle of a Hummer, when the emissions from manufacturing are included in that cycle. I don't know if that's true or not; it seems kind of unlikely but possible.
Now the question is, if your Le Sabre did qualify, would you have participated in the program despite being against (I'm assuming) all of this government spending?
But it's not all bad. The definition of a "clunker" is 18 mpg or less, which is a pretty sorry car. And at least the sodium silicate only destroys the engine, the rest of the parts can be salvaged or used as scap metal like with any junkyard car.
It's an interesting idea, that's helped the auto industry out by attracting the type of people who keep their cars a long time, rather than the wasteful sorts of people who want to upgrade every few years and the auto industry survives off. More of a bridge to hold the industry up until people who like only new cars can afford to buy them again. And if that's the case, although I feel for all the workers, is it worthwhile for the government to help keep the industry around? If the concern is carbon emmissions, I'd rather see government money go into rail. Wouldn't it be better for carbon emmissions overall if we stopped producing so many cars and people gave up their overconsumption of vehicles?
-Theresa
To answer your question, Brett: I don't have the money to buy a new car, so I was checking out of curiosity. But, If I did have the money for a new car, yes I would use the program, even though I don't think that the program should have been started in the first place.
Kind of an interesting question: when should we refuse to accept benefits from a government program on principle? Some people refuse to go on welfare, even though they do not abuse the system and are otherwise hardworking people down on their luck. Other people who oppose welfare programs on principle, will still reap benefits under them.
It kind of reminds me of something Ron Paul does. He opposes earmarks as wasteful, and pretty much votes against any appropriations bill with earmarks. Yet, he will put earmarks into legislation for his district, even though he intends to vote against the bill. I think that makes sense. You don't want there to be a trough to feed at, but if everyone else is feeding, it doesn't make sense for your constituents to lose out.
So, while a favor a flat(er) tax, I still will claim my dependent deduction (and every other deduction) on my tax return. And while I don't think there is any principled reason I should be able to deduct my mortgage interest, I will any way.
I guess I don't really know how to draw the line. I'll have to think it over more.