Cash for Clunkers has been a thrilling moment for advocates of expanded government, who say it proves what we can accomplish when our leaders put their minds to it. They are absolutely right. The program proves the federal government is unsurpassed at two things: dispersing money and destroying things.
Of course, it already proved that in Iraq. But for sheer rapidity of confirmation, this program is hard to beat. Cash for Clunkers managed to go through a billion dollars in about four days, vaporizing a fund that was supposed to last until Halloween.
The spectacle was particularly heartening to supporters of President Obama's fiscal stimulus plan, who had been disconsolate to find that when Washington attempts to embark on a sudden $787 billion spending spree, as it did last February, it needs months or even years to burn through the cash. Not only that, but it gave Congress a great excuse to throw more money onto the pyre.
In a period when financial pressures are forcing us all to adopt the forgotten ethic of "use it up, make it do, wear it out," the initiative is a throwback to the more extravagant days of 2007, when we were all spending like there was no tomorrow. It requires Washington to borrow funds to pay people to scrap perfectly functional vehicles merely because they get 18 miles per gallon or less, to subsidize cars that get 22 mpg or more.
The incentive is supposed to give a big boost to energy conservation. But there is less here than meets the eye, because it assumes the new owners will make no changes in their behavior. In fact, if you swap a gas hog for a less thirsty model, you'll probably drive the new vehicle more miles than you drove the old one, because each mile will cost you less.
The New York Times also says experts suspect the trade-ins are often "spare cars in multicar households, and driven very few miles every year." Transportation expert Lee Schipper of Stanford University and the University of California, Berkeley, said, "The new car doesn't replace the clunker, it replaces the previous first car in the family."
In many households, the results could be perverse. Say you've got a 5-year-old Volkswagen Passat and a 10-year-old Ford F-150 pickup. Whenever possible, you drive the Passat, which gets 27 mpg overall, and use the truck only when you have to.
But now you have a shiny new Toyota Camry that gets 23 mpg. So it gets the bulk of your miles, while the VW sits in the garage. In the end, you'll send more money to Riyadh than before.