Just by the virtue of being a popular program, many mainstream media outlets have declared Cash for Clunkers to be a success. This is a popular meme permeating America, but thankfully, you and I (and Townhall!) can all see through it.
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John Stossel has been on the Cash for Clunkers beat, pointing out that it mostly helps the rich and part of the middle class while hurting the poor.
Another unintended consequence of the Cash for Clunkers program is that poor people who can’t afford new cars – or expensive used cars -- will be crushed along with all those clunkers. If you can only afford $500 - $1,000 for a car, you’ll find many of these vehicles are now unavailable. They have been sent to the junk yard thanks to this program.
James Pethokoukis as Reuters notes that while the program may seem successful, it only represents the same old policy of the Obama administration.
The rebate program is also emblematic of the administration’s unwise approaches to economic policymaking. It borrows money to generate economic activity, which in effect borrows growth from the future, since eventually that loan will have to be paid back through higher taxes.
It picks and promotes a particular industry in a sort of small-scale industrial policy. It also places an emphasis on consumer spending as a route to renewed prosperity over greater investment.
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Over at the Volokh Conspiracy, Jonathan Adler says the program is most likely not helping the economy as a whole at all.
It appears the program shoe-horned months worth of car sales into a week or two, and may not have increased overall car sales much at all.
While automakers may like the program, there's little reason to believe it will contribute to an economic recovery.
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