The Cash for Clunkers program gave car buyers rebates of up to $4,500 if they traded in less fuel-efficient vehicles for new vehicles that met certain fuel economy requirements. A total of $3 billion was allotted for those rebates.
The average rebate was $4,000. But the overwhelming majority of sales would have taken place anyway at some time in the last half of 2009, according to Edmunds.com. That means the government ended up spending about $24,000 each for those 125,000 additional vehicle sales.
Facing these horrible numbers, the Obama administration still insisted the program was a success:
"It is unfortunate that Edmunds.com has had nothing but negative things to say about a wildly successful program that sold nearly 250,000 cars in its first four days alone," said Bill Adams, spokesman for the Department of Transportation. "There can be no doubt that CARS drummed up more business for car dealers at a time when they needed help the most."
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The point that this program was a total waste of money and failure in economic philosophy is apparently lost on this administration. Do they really think the federal government could pour money into an industry and not have positive sales? The point Edmunds.com makes is that the return on investment taxpayers received for their money was pretty negligible. Meanwhile, the wasteful spending has stopped and *surprise!* the car industry is still hurting.
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