Now that "Cash for Clunkers" is thankfully in our rear-view mirror, perhaps it's time to evaluate the economic and historical impact of the program.
Let's see, auto analysts at Edmunds calculate that the government needlessly stimulated car sales that would have happened anyway. Estimated cost? About $24,000 (of borrowed money) per car.
Car sales figures show that yes, the Cash for Clunkers program TEMPORARILY stimulated the auto market, which then promptly fell back to previous sales levels once the the government "stimulus" ended.
So why was the government so eager to continue this bad economic policy, even printing more money to continue the program? Did they really believe it to be an effective stimulus measure? Was it because we, the Collective, now own General Motors (GM) and they expected to sell more GM cars? GM came in second overall behind Toyota. Japanese and Korean manufacturers benefited most.
Or, was it to pump the durable goods financial statistics so that the government can claim that the recession is over?