Cash for Clunkers: Notable Quotables

[All-American]

This from a CNN article, quoting people who traded in their cars.

With two children, big grocery purchases and a drive to save the planet, we'd been considering getting a new car even before the Cash for Clunkers program.

We've known for a year or two that we needed to replace the Chevy. . . . And it's not lost on me that this program is funded by taxpayers. Does it make me part of the financial problem?

Fresh steel for the scrap yard, and another hole in my wallet!

I was going to get her a used car, but Cash for Clunkers made it possible to buy a new Elantra. . . . I'd like to thank all the other people in the country who helped my daughter get a new car.

http://money.cnn.com/galleries/2009/..._in/index.html

[Color Me Badd Fan]

I'm a little surprised about all of the controversy that's been brewing about the Cash for Clunkers program. Between the tax "rebates" last year and the auto bailouts, I thought this was a fairly insignificant piece of legislation. $1 billion is hardly anything in the scheme of things and is really dwarfed by the two other items I talked about. Yet it seems that this getting almost as much discussion.

I have something to confess to everyone. I took advantage of the Cash for Clunkers program. I had a perfectly functional 1997 Chevy Tahoe. It didn't have any exterior problems and was in okay mechincal shape. But it also had 168k miles on it and got 13 mpg and you can only count on an American piece of automotive machinery for so long.

It is true that my wife and I were going to buy a car within the next year. We put up with the Tahoe because we didn't want a second car payment on our credit when we bought a house late last year. While we were getting a couple other items paid off, we continued to put up with it. The amount I could have traded the Tahoe in for was only $2.5k, so $4.5k represented a windfall that we couldn't pass up.

I had a surprisingly tremendous amount of guilt sending the Tahoe away to its doom. But then I thought about taking a hypothetical trip in August that would have to involve driving the stretch of highway between Vegas and Barstow and then the Tahoe breaking down on the way. It wasn't a pleasant thought.

The article illustrates one of the surprising points from this program. People really are upgrading to much more fuel efficient cars. An aggregate increase of 10mpg is not insignificant.

Also, I think there's something to be said about this program giving the impression that people still have some money to spend. To a certain extent at this phase of the recession, consumer confidence plays a huge role in what's going to happen in the next several months.

[Donuthole]

. . . you can only count on an American piece of automotive machinery for so long.

At least 13 years, it sounds like.

[All-American]

I'm a little surprised about all of the controversy that's been brewing about the Cash for Clunkers program. Between the tax "rebates" last year and the auto bailouts, I thought this was a fairly insignificant piece of legislation. $1 billion is hardly anything in the scheme of things and is really dwarfed by the two other items I talked about. Yet it seems that this getting almost as much discussion.

I have something to confess to everyone. I took advantage of the Cash for Clunkers program. I had a perfectly functional 1997 Chevy Tahoe. It didn't have any exterior problems and was in okay mechincal shape. But it also had 168k miles on it and got 13 mpg and you can only count on an American piece of automotive machinery for so long.

It is true that my wife and I were going to buy a car within the next year. We put up with the Tahoe because we didn't want a second car payment on our credit when we bought a house late last year. While we were getting a couple other items paid off, we continued to put up with it. The amount I could have traded the Tahoe in for was only $2.5k, so $4.5k represented a windfall that we couldn't pass up.

I had a surprisingly tremendous amount of guilt sending the Tahoe away to its doom. But then I thought about taking a hypothetical trip in August that would have to involve driving the stretch of highway between Vegas and Barstow and then the Tahoe breaking down on the way. It wasn't a pleasant thought.

The article illustrates one of the surprising points from this program. People really are upgrading to much more fuel efficient cars. An aggregate increase of 10mpg is not insignificant.

Also, I think there's something to be said about this program giving the impression that people still have some money to spend. To a certain extent at this phase of the recession, consumer confidence plays a huge role in what's going to happen in the next several months.

Next time I need a ride somewhere, I'm calling you. It's only appropriate, seeing as how I bought that car.

[Color Me Badd Fan]

Next time I need a ride somewhere, I'm calling you. It's only appropriate, seeing as how I bought that car.

Sure, give me a call. I also have an FHA Loan and am taking advantage of low interest loans due to the TARP money that flooded into the banks. I also had federally subsidized school loans. I'm living off the public dole!

[Color Me Badd Fan]

At least 13 years, it sounds like.

It was also on its third transmission. Amongst other things, the A/C and powersteering units were replaced. It was still on the original engine and I don't think the rear end or transfer case had been replaced, but it was only a matter of time. Even though it had 168k miles, at least 80-90k miles were pure highway miles (my pop used to drive it around 8 times a year between Salt Lake and California, and that went on around 8 years).

[fusnik]

These are the same people who probably:

-Purchased their first home under some program, FHA, FFCB, FNMA, FHLB, etc.

-Received help paying for school through SLMA.

Are people really bitching about this program?

[All-American]

These are the same people who probably:

-Purchased their first home under some program, FHA, FFCB, FNMA, FHLB, etc.

-Received help paying for school through SLMA.

Are people really bitching about this program?

Me, for one.

[fusnik]

Me, for one.

Consumer spending = good

GM selling cars = increased ability to pay back taxpayers

Inefficient cars exchanged for more efficient = win for Mother Earth

[All-American]

Consumer spending = good

GM selling cars = increased ability to pay back taxpayers

Inefficient cars exchanged for more efficient = win for Mother Earth

Taking more money from taxpayers in an era of unprecedented deficits, encouraging Americans to pour their money in one of the most quickly depreciating assets imaginable at the expense of sound personal financing, and destroying valuable property to make it happen.

Sounds like we'll have to agree to disagree.

In my not-so-humble opinion, the root of the nation's financial woes is the same creature as the one hovering over so many individuals: we have not learned not to spend what we don't have. If you haven't learned to say "we can't afford it", you're in for a hard landing no matter how much money you make. Exacerbating this problem is the second factor contributing to the national economic crisis, only slightly behind the first in significance: the idea that somebody else is paying for it. The rich will pay for health care. Taxpayers pay for my cars. The federal government will give us that grant. As Milton Friedman noted, when you are spending somebody else's money, you don't really care how much is spent. Until we resolve those two personality flaws, at least on a national level (which may necessitate resolving them on an individual level), rest assured that more problems lie around the corner.

Cash for clunkers, as far as I am concerned, only feeds the beast.

[Tim]

Next time I need a ride somewhere, I'm calling you. It's only appropriate, seeing as how I bought that car.

More like you donated roughly $5 to that car.

[il Padrino Ute]

More like you donated roughly $5 to that car.

A shareholder is still considered an owner, no?

[All-American]

More like you donated roughly $5 to that car.

Amazing how it all adds up, isn't it?

[I.J. Reilly]

In my not-so-humble opinion, the root of the nation's financial woes is the same creature as the one hovering over so many individuals: we have not learned not to spend what we don't have. If you haven't learned to say "we can't afford it", you're in for a hard landing no matter how much money you make. Exacerbating this problem is the second factor contributing to the national economic crisis, only slightly behind the first in significance: the idea that somebody else is paying for it. The rich will pay for health care. Taxpayers pay for my cars. The federal government will give us that grant. As Milton Friedman noted, when you are spending somebody else's money, you don't really care how much is spent. Until we resolve those two personality flaws, at least on a national level (which may necessitate resolving them on an individual level), rest assured that more problems lie around the corner.

This hits on something that ER (I think) was talking about the other day, and the problem is, the American economy needs us to spend more than we have. Savings rates decreases have coincided with a rise in the availability of revolving lines of credit for consumers, which coincides with a growth in our economy, as measured by GDP. I think one of the most innovative solutions out there I have heard for this is to stop using GDP as a measuring stick and instead use Key National Indicators. The Peter G. Peterson Foundation and their CEO David Walker (former Comptroller General of the US and head of the GAO) have a weatlh of information about this and seem to be leading the charge in this area.

[Hallelujah]

[QUOTE=All-American;132289]This from a CNN article, quoting people who traded in their cars.QUOTE]

Brilliant strategy by the Dems. They originally wanted $4B. No way were they going to get that passed. So they start at $1B and now the price tag is $3B.