Cash for Clunkers Success

[ArlJim78]

Originally Posted by Riot

But they were not buying cars. That is the point. We were in a deep recession last year, deeping towards a depression. Nobody was buying cars. Auto workers were laid off. The industry was in deep trouble. The program obviously was a success in that it got thousands spending money in the economy. Which is what is needed to get out of a recession.

people weren't buying cars for a reason and they still won't be buying cars now that this program has ended. the last thing we need is more of the phony borrow and consume economy. we need to save and invest.

this is only a temporary artificial demand, it means nothing in the long run with regard to the real economy. it will make a spike in car sales to be followed by a trough.

I'll bet you didn't know that during the runup to this program car prices were raised, so the deal buyers got wasn't all you might think.

this has next to nothing to do with when the recession ends. government spending does not create wealth or growth, just the opposite.

[Danzig]

http://www.msnbc.msn.com/id/32512922...nting_america/


While small in comparison to other stimulus programs, Cash for Clunkers adds to the perception that Obama is simply trying to spend his way out of the economic downturn and let future generations deal with the consequences. The White House is expected to announce next week that the federal deficit will be a record $1.58 trillion for the current 2009 fiscal year, about $262 billion less than predicted earlier but still three times as large as last year.

"It fits into that theme of artificially trying to pump up the economy in the short run but in my view at the expense of long-term growth," said Chris Edwards, an economist with the libertarian Cato Institute. "It increases the government's debt and will probably, like those other temporary programs, produce higher inflation in the future."