- A vehicle getting 15 mpg and 12,000 miles per year uses 800 gallons a year of gasoline.
- A vehicle getting 25 mpg and 12,000 miles per year uses 480 gallons a year.
- So, the average Clunker transaction will reduce US gasoline consumption by 320 gallons per year
- They claim 700,000 vehicles – so that's 224 million gallons per year.
- That equates to saving a bit over 5 million barrels of oil per year. I repeat---per YEAR.
- 5 million barrels of oil is about ¼ of one day's US consumption.
- And, 5 million barrels of oil costs about $350 million dollars at $75/bbl.
- Our Government "gave" each Clunker Trader $4,500 per car for 700,000 transactions which cost US Taxpayers $3,150,000,000--not including Washington's astounding administrative costs.
- So, we all contributed through our taxes to spend more than $3 billion to save $350 million.
Interesting idea that wasn't well thought out and was poorly implemented. No surprise!
Another example of a poorly-conceived and poorly-administered government program, costing us billions of dollars we don't have.
ReplyDeleteThat's a simple way of looking at how the program is setup. GM as a company being too big to fail was based on all the companies that spin off from Ford, GM and Chrysler. The GOV. know what the stats are and saw by letting GM fail you would have a swell of business failures in the midwest. Adding another 6-7M people on unemployment would be way too costly plus bringing new industries into a area takes years on end to accomplish. My brother has worked for a private company in Ft.Wayne, IN. for over 25 years. They manufacture pneumatic and hydraulic parts with a large majority of sales to automotive companies American and foreign. His company was on the verge of collapse when the auto industry took it on the chin. The clunkers program caused a dramatic increase in their sales. They were able to bring back 8 individuals that were previously laid off. So you might find people that work in the industry maybe supporting a different perspective than what you write.
ReplyDeletePeople complaining that this program increased sales on foreign cars although true probably don't understand how many "foreign" cars are actually built here with parts built in the US. Plus even though a car that was built in Korea and sold here that still keeps people employed at the dealership maintaining those cars.
A lot of people that are quick to shoot this program down do so because it was pushed by a Democratic President but something had to be done. Is it the best? Was it the best investment?
Probably No but did anybody hear of any other programs that were better besides let it fail?
I have little faith in any Gov. program being successful because the first thing I see are the insiders tearing the program apart figuring out how to get rich defrauding the program. Just like Medicare, Medicaid and whatever abortion is passed for health care the one constant variable that will stay consistent is there will certainly be massive fraud. I think the Gov. this time tried to wrap some additional procedures around the program to ensure we weren't getting ripped off causing delays on dealerships receiving payments. Let's face it, the last administration had an absolutely horrible record of program administration. The majority being pushed off to private firms that donated to their campaigns earning no bid contracts. The money wasted concerning Katrina would have been better spent bailing out the banks. Isn't that a sad perspective.
I agree on the failures of previous administrations and I'm glad some jobs were saved by the program.
ReplyDeleteThe problem I have is that artificailly bloating the auto sales numbers for one quarter isn't the answer. There needs to be a transformation in manufacturing because we can no longer support these jobs with auto sales long-term.
The other thing that goes unnoticed is that used car dealers, independent service shops, and auto salvage companies suffer at the hands of this program.
It is not about tearing down government plans, but speaking out in favor of well thought out strategies instead of band aids that cost us more than they are worth and can lead to longer-term problems.