Better World Club

Tuesday, August 25, 2009

CASH FOR CLUNKERS: THE IMPERFECTION OF U.S. POLITICS

If We're Giving Money to the Auto Industry, Lets Give It To Consumers, Not Directly to GM

But If We Want to Encourage Green Car Purchases, Why Can You Turn In a 16 MPG Vehicle for a 20 MPG Vehicle?


The "Cash for Clunkers" program ended on Monday and, despite some carping, has proven itself successful in many ways.

If necessary for the revival of the auto industry, the program should be brought back. It's a far better way to provide money to the auto industry than giving the money directly to the auto companies.

However, there's a certain silliness about it. It has many purposes: to stimulate the economy (check), to bolster the auto industry (check), and to encourage energy independence and improve the environment (che...not so fast).

Former CIA Chief James Woolsey, now an energy independence activist, told BWC President Mitch Rofsky that getting gas hogs off the road was one of the most effective things our government could do to make the U.S. energy independent. Unfortunately, the government will still provide consumers with $3,500 even if their new vehicles get a mere 4 MPG improvement over their old ones. That's not enough--and is pretty silly. (A $4,500 credit is provided if the new purchase increases fuel efficiency by at least 10 MPG.)

So, keep Cash for Clunkers going if necessary...but come on. Next time around, adjust it so all of its goals can be met.

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