Two Tales of One Program: Cash for Clunkers

The “Cash for Clunkers” program is an interesting one for me because I heard an editorial on how terrible it was, and then the next day I read a testament to its greatness, so I thought it warranted a closer look.  In a nutshell, the plan works like this: people turn in their old cars for cars that are more fuel efficient, and the car owners receive money for it–possibly as much as $4500 depending on the specifics.  Then the dealer takes the old cars and destroys their engines, a process for which the government pays them.  So, the country sells more new cars, and  we aren’t using as much gas.  How do we pay for this?  Initially, the government earmarked a billion dollars for this, but now Congress has added another two billion to the price tag.

Now for the spin.

Some conservatives hate the plan.  They point out that, like seemingly every government program, this one is way more expensive than it was intended to be.  And apparently the government has been slow to process all of the paperwork, so dealers aren’t getting paid in a timely to destroy the old cars–yet another example of government incompetence.  Also, goosing the market for new car purchases is good for Detroit and its auto worker unions who are being taken care of after voting Democrat, but there is a group of Americans who are being left out of the equation.  Some people can only afford to buy old clunkers.  If the government starts destroying them, those which are left will cost more money.

Liberals are in love with the plan.  It has increased car purchases, and it is environmentally friendly.  Yes, it is costing more than initially thought, but it is a relatively small figure compared to other government expenditures.  Conservatives only hate the plan because it is making President Obama and the Democrat-controlled Congress look good.

Both sides might try to create linkage between this issue and healthcare.  Liberals will say  this shows that the federal government can do good things–the public has embraced “cash for clunkers” with unexpected enthusiasm, so trust the government on healthcare.  Conservatives will argue just the opposite.  If “cash for clunkers” is the shape of things to come, then expect healthcare reform to cost way more than liberals are saying, and expect it to run inefficiently.