Photo by youngthousands
The new “Cash for
Clunkers” program is a big deal. A bigger deal, in fact, than the lawmakers who
created it could forecast: they expected the initial $1 billion, which was
exhausted in less than a week, to last until about November 1. Since then, the
operation has tripled in size—and Congress approved an additional $2 billion to
keep the program running.
Over and above the
expected big-figure complaint about the Clunkers legislation, there are questions
of just how effective a stimulus action this is, given that environmental
gains are arguably minimal and 55
percent of the new cars being purchased with government supplements are
foreign makes.
In the initial
legislation sponsored by Rep. Betty Sutton (D-OH), discounts for vehicles made
overseas would have been barred, and those made in Canada or Mexico would have
received lower payments than those manufactured domestically. But those
provisions were scrapped when it was pointed out that they are in violation of
U.S. obligations to the World Trade Organization.
Without those provisions,
critics
say, the Clunkers program fails to give the U.S. economy a shot in the arm;
rather, it’s sending all that local money overseas.
Top New Car Purchases
under "Cash for Clunkers," by model
- Toyota Corolla
- Ford Focus FWD
- Honda Civic
- Toyota Prius
- Toyota Camry
- Ford Escape FWD
- Hyundai Elantra
- Dodge Caliber
- Honda Fit
- Chevrolet Cobalt
A foreign name on the
hood doesn’t necessarily mean that the cars are coming from overseas, or that
all of the profit is headed there.
“A lot of these cars are made in America
by American workers in plants that are right here in America,” explained
Transportation Secretary Ray LaHood. (LaHood is also an honorary member of the
Department of Redundancy Department).
More than 95 percent of
Honda Civics, one of the program’s most popular new purchases, are built in
factories in Greensburg, Indiana, and Alliston, Ontario.
Ontario, of course, is
not one of LaHood’s American plants right here in America. But it is closer
than Japan.
All-American companies
are taking a share of the winnings too: 45
percent of the sales belong to Detroit Big 3 auto plants, and General
Motors has sold more cars under the operation than any other make. Not to
mention, the government only pays for a fraction of the car’s cost; buyers have
to fork over the rest of the money, turning the $3 billion federal injection
into $21 billion flowing through the auto industry, CNN
reported.
The actual Clunkers
savings potential for oil is a bit fuzzier, since U.S. News suggests that SUV
sales might be benefitting
more than any others from the legislation. But in terms of economic
benefit, there are still reasons to believe that the Cash for Clunkers will be
worth the effort. After all, isn’t entirely unique: 10 countries around the
world are operating a version of Cash for Clunkers, and Germany has already
seen significant
benefit.
Top New Car Purchases under "Cash for Clunkers," by make
- General Motors
18.7%
- Toyota 17.9%
- Ford Motor 16.0%
- Honda
11.6%
- Chrysler 10.6%
- Nissan
7.0%
- Hyundai 6.6%
- Kia
3.8%
- Mazda
2.3%
- Subaru
2.2%
- Volkswagen 1.9%
- Suzuki
0.4%
- Mini
0.3%
- Mitsubishi 0.3%
- Smart 0.2%
- Volvo
0.1%