Friday, August 07, 2009

Mrs. S writes 

This month, it's the topic we all love, Cash for Clunkers:
As a businessman, it's hard to be against all the traffic it has generated, but he hopes it is not a temporary fix. "It's like priming an engine with no gas in the tank. If it helps the economy, it's a good thing".

"The tax-payer, however, is the one who will eventually pay".

And perhaps they know it. According to a recent Rasmussen survey, a majority of Americans (54%) oppose more funding for this program. A similar share opposed it last year when the idea was floated in 2008.

Will the philosophy behind �Clunk-fare� eventually be used on the housing market? Clothing market? Probably not, because the government has made this program with an eye towards increasing fuel efficiency. But the Associated Press reported this week that the amount of pollution reduced is equivalent to us not emitting any greenhouse gases for 57 minutes. The fuel economy savings equals the amount of gas we use in 4.5 hours.
In the research for her article, she sent along this piece, which includes a quote:
"As a carbon dioxide policy, this is a terribly wasteful thing to do," said Henry Jacoby, a professor of management and co-director of the Joint Program on the Science and Policy of Global Change at MIT. "The amount of carbon you are saving per federal expenditure is very, very small."
Now the program has another $2 billion in the kitty, another 400,000 or more cars going off the road. And is it stimulus? Maybe, maybe not:
Ford Motor Co., General Motors Co. and Chrysler Group LLC are weighing whether to increase output of vehicles beyond current plans, which would increase workers' hours and possibly add some jobs at their plants and those of hundreds of suppliers. But the auto makers have reason to be cautious. Big sales promotions are often followed by a slump in sales -- "payback," in industry jargon. Battered by losses in the past year, the big Detroit auto makers want to keep supply and demand in balance in order to boost profitability.
We may have just spent $3 billion to help automakers clear their inventory and created very few new jobs and little carbon reduction.

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