Ornery.org
  Front Page   |   About Ornery.org   |   World Watch   |   Guest Essays   |   Contact Us

The Ornery American Forum Post New Topic  Post A Reply
my profile login | register | search | faq | forum home

  next oldest topic   next newest topic
» The Ornery American Forum » General Comments » Cash for Clunkers (Page 1)

 - UBBFriend: Email this page to someone!   This topic comprises 4 pages: 1  2  3  4   
Author Topic: Cash for Clunkers
G2
unregistered


 - posted            Edit/Delete Post   Reply With Quote 
Great program, great story ... right? Let's check it out:
quote:
Rep. Joe Sestak, D-Pa., called for "immediate action" to address the problem in a statement Sunday, after writing a letter to President Obama Saturday expressing his concerns.

In the letter, Sestak said only 2 percent of claims have been paid and that four of every five applications have been "rejected for minor oversight."

Only 2% are approved? Seriously, WTF? Dealers have submitted requests for rebates on 338,659 vehicles. That means only 6,773 were approved. All the rest were rejected. The problem for dealers is they've already sold the new car and junked the trade-in expecting to get paid. They're out the money and the trade-in so they have no way to recover the loss except through this program and right now it looks like they'll recover about, well, 2%.

How much are the dealers out? Dealers were expecting to get reimbursed between $1,185,306,500 and $1,523,965,500. They got between $23,706,130 and $30,479,310 - over a billion dollars loss.
quote:
"Failure to address delays with the cash for clunkers program will adversely harm auto dealers in the commonwealth of Pennsylvania and around the country -- undoubtedly forcing many out of business," he [Sestak] said in a statement.
Gee, ya think? I, for one, am shocked - shocked - that a government program does not deliver on it's promises. First time evah! Heh.

The reality is the dealers cannot sustain a billion dollar plus loss, they have to be getting into a cash flow situation soon. Sestak is correct that this will force dealers out of business and probably sooner rather than later. To Sestak's credit, he sent a letter to President Obama Saturday expressing his concerns. Way to drop the hammer there Joe! Something will undoubtedly happen real soon now™. Those dealers can rest easy. Yeah.

Speaking of the money, this program apparently ran out of it a couple of weeks ago. It started with $1 billion, paid out at most $30,479,310 and it was reportedly broke. Consequently it was given another $2 billion. What happened to the remaining $970 million in that original $1 billion? Did they still have it? Then why the need for more? The auditors assigned to oversee this program will no doubt ... wait, auditors ... hmmm. Exactly what oversight was put in place to oversee the disbursement of $3 billion dollars? I looked around and can't find it but maybe I just missed it, it happens. Anybody got a link to show how this money is monitored?

But don't anybody panic, these exact same people got that health care thing all figured out. Fo sheezy!

IP: Logged | Report this post to a Moderator
threads
Member
Member # 5091

 - posted      Profile for threads   Email threads   Send New Private Message       Edit/Delete Post   Reply With Quote 
Are there any more details on why the claims were rejected? Also, if you quote an article then you should link to it.
Posts: 778 | Registered: Aug 2007  |  IP: Logged | Report this post to a Moderator
aupton15
Member
Member # 1771

 - posted      Profile for aupton15   Email aupton15   Send New Private Message       Edit/Delete Post   Reply With Quote 
Indeed. Inquiring minds want to know more than two snippets ;-)
Posts: 1445 | Registered: May 2004  |  IP: Logged | Report this post to a Moderator
sfallmann
Member
Member # 2148

 - posted      Profile for sfallmann   Email sfallmann   Send New Private Message       Edit/Delete Post   Reply With Quote 
http://www.foxnews.com/politics/2009/08/16/auto-dealers-paid-just-percent-clunkers-claims-congressman-says/?loomia_ow=t0:s0:a16:g12:r1:c0.729362:b27199488:z0

Here's a link.

Posts: 396 | Registered: Nov 2004  |  IP: Logged | Report this post to a Moderator
G2
unregistered


 - posted            Edit/Delete Post   Reply With Quote 
Applications were "rejected for minor oversight." Whatever that means.
IP: Logged | Report this post to a Moderator
Wayward Son
Member
Member # 210

 - posted      Profile for Wayward Son   Email Wayward Son   Send New Private Message       Edit/Delete Post   Reply With Quote 
So the dealers are going to resubmit the applications, right?
Posts: 8681 | Registered: Dec 2000  |  IP: Logged | Report this post to a Moderator
JoshCrow
Member
Member # 6048

 - posted      Profile for JoshCrow   Email JoshCrow   Send New Private Message       Edit/Delete Post   Reply With Quote 
Some more info:

Baltimore Sun

quote:

As of last week, Maryland dealers had submitted claims for $34.4 million in reimbursements.

But few of those dollars have made their way back to Maryland.

"It's getting to the point where we can't keep sustaining this thing," said Peter Kitzmiller, president of the Maryland Automobile Dealers Association. "We can't afford to keep putting out money."

The regulations called for dealers to be reimbursed in seven to 10 days, Kitzmiller said. "That certainly hasn't been the case."

The Maryland dealers association surveyed 300 members last week about the program. Among the 70 respondents so far, fewer than 2 percent of claims for reimbursement have been paid. Nine percent had been rejected, while another 9 percent were approved but not yet paid.

Kitzmiller said the government owes some dealers hundreds of thousands of dollars and even millions.

Government officials say part of the problem is that dealers submit incomplete claims, which in turn cause delays.

Federal officials told auto associations last week that the government was assigning an extra 1,000 workers to process claims, Kitzmiller said. Dealers would be relieved if they started seeing an increase in the pace of reimbursements this week, he said.

Sounds like they seriously understaffed this effort... but then, one can more or less count on the government to be a little slow to let go of money.
Posts: 2281 | Registered: Mar 2008  |  IP: Logged | Report this post to a Moderator
G2
unregistered


 - posted            Edit/Delete Post   Reply With Quote 
I assume they would - I'd resubmit the hell out of them. With a initial success rate of 2%, I'd be pretty worried though. With the processing time, which is apparently lengthy and error prone (I guess that's what minor oversight is), how long can the dealers float over $1 billion in debt? A month? Two? Maybe 3? I dunno but I bet their cash flow ain't all that great as it is and taking this big a bite out of it can't help.
IP: Logged | Report this post to a Moderator
G2
unregistered


 - posted            Edit/Delete Post   Reply With Quote 
Even more on the success of this program:
quote:
The popular program is being blamed for hurting charities that rely on donations of cars to fund social programs.

Those charities say their donations have fallen up to 12-percent already since “Cash for Clunkers” was implemented.

They fear that as time goes on, their annual donations will drop 25-percent, which amounts to more than 100-million dollars.

Wow, everybody wins!
IP: Logged | Report this post to a Moderator
JoshCrow
Member
Member # 6048

 - posted      Profile for JoshCrow   Email JoshCrow   Send New Private Message       Edit/Delete Post   Reply With Quote 
... although it wouldn't surprise me if the social programs would have ended up supporting all the auto-workers and dealers who would have been unemployed without the Cash for Clunkers effect of pushing car sales. [Wink]

G2, you have to admit, for all its problems the program HAS been an important boon to the auto-industry in a time where it was suffering miserably. If you're going to point out the problems, you should also note the successes.

[ August 18, 2009, 03:41 PM: Message edited by: JoshCrow ]

Posts: 2281 | Registered: Mar 2008  |  IP: Logged | Report this post to a Moderator
G2
unregistered


 - posted            Edit/Delete Post   Reply With Quote 
quote:
Originally posted by JoshCrow:
G2, you have to admit, for all its problems the program HAS been an important boon to the auto-industry in a time where it was suffering miserably. If you're going to point out the problems, you should also note the successes.

But is this a real success? It has been successful in creating an artificial demand - people who normally would not have purchased a car right now have done so. That does create a short term spike in sales but it is only sustainable as long as the program remains to support it. Once this program goes away, the sales will plummet back to real demand. If this is any success at all, it's a very short term one and one the auto makers cannot plan on lasting unless they plan on government subsidy in perpetuity.

What about those car dealers and their cash flow? It hasn't been much of a success for them and if things don't get ironed out quick, fast and in a hurry then it could be bankruptcy for more than a few of them.

IP: Logged | Report this post to a Moderator
Dave at Work
Member
Member # 1906

 - posted      Profile for Dave at Work   Email Dave at Work   Send New Private Message       Edit/Delete Post   Reply With Quote 
It certainly has driven up sales in the time period that it has been in place. I see two shoes that could drop here though.

The first is what G2 started this thread about. Will the dealerships be left holding the bag, so to speak, on a significant number of these transactions? How many of these dealerships might face significant financial harm or even bankruptcy if this happens? I don't think that the dealerships will be all that thankful for the short term boom in business if it means they go out of business because of it.

The second is how much of this recent boom in business is due to people timeshifting their next automobile purchase? How many people decided to buy a vehicle now instead of 6 months or a year from now to take advantage of the CARS program? If that number is significant, will that translate into reduced car sales at some point in the future? In short how many car sales were actually generated that would not have happened within the next year or two anyways?

Posts: 1928 | Registered: Jul 2004  |  IP: Logged | Report this post to a Moderator
Pyrtolin
Member
Member # 2638

 - posted      Profile for Pyrtolin   Email Pyrtolin   Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
Originally posted by Dave at Work:
The second is how much of this recent boom in business is due to people timeshifting their next automobile purchase? How many people decided to buy a vehicle now instead of 6 months or a year from now to take advantage of the CARS program? If that number is significant, will that translate into reduced car sales at some point in the future? In short how many car sales were actually generated that would not have happened within the next year or two anyways?

Which is countered by the question that since production is being stepped up again and people are making more money, how many car (and other) purchases that would not have happened at all will now happen because more people are making money and thus can spend it on such things? Also how many people, due to savings on fuel will now be more able to make other purchases and put money in the pockets of other workers?

The boost doesn't have to last forever, just until baseline economic health recovers enough to meet it and begin to push it up naturally.

Posts: 11997 | Registered: Oct 2005  |  IP: Logged | Report this post to a Moderator
Funean
Member
Member # 2345

 - posted      Profile for Funean   Email Funean   Send New Private Message       Edit/Delete Post   Reply With Quote 
Well, there's nothing inherently wrong with inspiring people to make a purchase earlier than they might otherwise have. That's what "sales" are all about. Sales address a cash flow issue for businesses by enabling them to move existing merchandise (ie an already sunk cost) and receive actual slightly fewer dollars now, as opposed to potential slightly more dollars later.

Sales only address future revenue insofar as they may create satisfied customers who will remember the retailer for a later purchase and inasmuch as they may keep the buiness from going under now, thus effectively preventing future revenue. So I think the "whaddabout six months from now, eh?" argument is not germane.

With regards to the question of whether the guvmint should be in the business of drumming up business for car companies, well, the guvmint is a pretty big shareholder in those companies at the moment.

I think the environmental angle is pure marketing, as the net effect is probably not significant, especially since there's no way of knowing whether the program will result in a net fewer gallons guzzled (if you drive more because your car is cheaper to fuel, you're not reducing emissions). And, as long as we're supporting an industry, I'd have preferred the program to provide an incentive for US companies or at least cars built in the US.

Overall I think the net effect is not worth the paperwork involved.

Posts: 5277 | Registered: Mar 2005  |  IP: Logged | Report this post to a Moderator
G2
unregistered


 - posted            Edit/Delete Post   Reply With Quote 
quote:
Originally posted by Pyrtolin:
quote:
Originally posted by Dave at Work:
The second is how much of this recent boom in business is due to people timeshifting their next automobile purchase? How many people decided to buy a vehicle now instead of 6 months or a year from now to take advantage of the CARS program? If that number is significant, will that translate into reduced car sales at some point in the future? In short how many car sales were actually generated that would not have happened within the next year or two anyways?

Which is countered by the question that since production is being stepped up again and people are making more money, how many car (and other) purchases that would not have happened at all will now happen because more people are making money and thus can spend it on such things? Also how many people, due to savings on fuel will now be more able to make other purchases and put money in the pockets of other workers?

The boost doesn't have to last forever, just until baseline economic health recovers enough to meet it and begin to push it up naturally.

More people are making money? Unemployment is still rising, wages are falling. Fewer people are making money now than have been in quite a long time (except for Soros of course). Production may be stepping up but it's in response to an artificial demand due to the time shifting of a purchase decision. There will be significant slack in this at some point.

And whatever fuel savings they get are more than offset by the car payment by a very, very long ways. It won't even be close.

IP: Logged | Report this post to a Moderator
Greg Davidson
Member
Member # 3377

 - posted      Profile for Greg Davidson   Email Greg Davidson   Send New Private Message       Edit/Delete Post   Reply With Quote 
Cash for clunkers convinced me to make a purchase that I would have put off for years. We got rid of a 94 Mercury Villager and bought a 2010 Toyota Corolla (the first new car I have ever got to drive for myself). We're financially strained right now with two kids in college (and had to take the 3rd one out of private school to pay for the first two). But with a $4500 gov't credit and $1,000 in manufacturer's rebates from Toyota, we were able to get a Corolla for $12,600 (and $1200 of that went to California sales taxes). It meant that I fully researched tapping into my 401(k) as our contingency money if there's any major unexpected expenditure or loss of income.

So the federal government put up $4500 and encouraged me to take a risk I otherwise would not have, thus leveraging their stimulus money by 3 to 1.

By the way, we picked a Toyota because of the list of 8 cars I was interested in, it had the highest domestic content.

Posts: 4178 | Registered: Dec 2006  |  IP: Logged | Report this post to a Moderator
Greg Davidson
Member
Member # 3377

 - posted      Profile for Greg Davidson   Email Greg Davidson   Send New Private Message       Edit/Delete Post   Reply With Quote 
Oh, and the reason why I didn't put that money into Zakkai's private school instead was that $12,600 isn't nearly enough (it is the most perfect high school I could imagine, but the cost is astronomical)
Posts: 4178 | Registered: Dec 2006  |  IP: Logged | Report this post to a Moderator
Pyrtolin
Member
Member # 2638

 - posted      Profile for Pyrtolin   Email Pyrtolin   Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
Originally posted by G2:
More people are making money? Unemployment is still rising, wages are falling. Fewer people are making money now than have been in quite a long time (except for Soros of course). Production may be stepping up but it's in response to an artificial demand due to the time shifting of a purchase decision. There will be significant slack in this at some point.

The rate at which unemployment is increasing is very clearly slowing and every new job that is made available helps contribute to a positive feedback reaction that helps pull back against the negative feedback created by additional layoffs. Short another disaster or a repeat of 1936, we're rounding the bottom of the dip now. Unemployment will have peaked by the end of the year, and we'll be seeing some amount of growth by early next year. Every extra job that can be created, even for a little while, helps pull us back toward growth because it helps get money flowing properly again.
Posts: 11997 | Registered: Oct 2005  |  IP: Logged | Report this post to a Moderator
G2
unregistered


 - posted            Edit/Delete Post   Reply With Quote 
The fallout is starting:
quote:
Hundreds of auto dealers in the New York area have withdrawn from the government's Cash for Clunkers program, citing delays in getting reimbursed by the government, a dealership group said Wednesday.

The Greater New York Automobile Dealers Association, which represents dealerships in the New York metro area, said about half its 425 members have left the program because they cannot afford to offer more rebates. They're also worried about getting repaid.

"(The government) needs to move the system forward and they need to start paying these dealers," said Mark Schienberg, the group's president. "This is a cash-dependent business."

<snip>

Many dealers have said they are worried they won't get repaid at all, while others have waited so long to get reimbursed they don't have the cash to fund any more rebates, Schienberg said.

Transportation Secretary Ray LaHood says the dealers will get paid, presumably that will happen real soon now. However, as Schienberg says, it's a cash dependent business and right now they ain't getting the cash.

As of this morning, dealers have made clunkers deals worth $1.81 billion and been reimbursed about $36 million - around $1.5 billion in cash has flown out of dealerships and there is growing fear they won't get it back despite LaHood's assurance so the dealers are starting to get out of the program.

IP: Logged | Report this post to a Moderator
Wayward Son
Member
Member # 210

 - posted      Profile for Wayward Son   Email Wayward Son   Send New Private Message       Edit/Delete Post   Reply With Quote 
So, G2, once this payment delay is taken care of and the dealers get their money and everybody is happy, what will be the point of this thread? [Wink] [Smile]
Posts: 8681 | Registered: Dec 2000  |  IP: Logged | Report this post to a Moderator
G2
unregistered


 - posted            Edit/Delete Post   Reply With Quote 
So, Wayward Son, when will it be taken care of and the dealers get their money?
IP: Logged | Report this post to a Moderator
LoverOfJoy
Member
Member # 157

 - posted      Profile for LoverOfJoy   Email LoverOfJoy   Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
So, G2, once this payment delay is taken care of and the dealers get their money and everybody is happy, what will be the point of this thread?
To stand as an omen of how effective the government will be with their health care plan.

Oh wait...

quote:
once this payment delay is taken care of and the dealers get their money and everybody is happy ...
To serve as fuel to try to melt the ice that froze over in hell? [Wink]
Posts: 3639 | Registered: Nov 2000  |  IP: Logged | Report this post to a Moderator
Wayward Son
Member
Member # 210

 - posted      Profile for Wayward Son   Email Wayward Son   Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
So, Wayward Son, when will it be taken care of and the dealers get their money?
Criswell predicts....

pretty soon. [Smile]

Posts: 8681 | Registered: Dec 2000  |  IP: Logged | Report this post to a Moderator
Gina
Member
Member # 6372

 - posted      Profile for Gina   Email Gina   Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
Originally posted by Wayward Son:
So, G2, once this payment delay is taken care of and the dealers get their money and everybody is happy, what will be the point of this thread? [Wink] [Smile]

To point out that the whole thing is ill-conceived, not to mention poorly constructed and administered, like every other government program. Destroying perfectly usable cars which would have been sold to lower-income people or donated to charity, simply for the ideological whims and crony payoffs of the Democrats. Sort of like the FDR administration destroying food supplies during the Depression in order to prop up price controls, even though people were going hungry. Why give a man a fish when you can teach him to be a slave to the welfare state?
Posts: 476 | Registered: Nov 2008  |  IP: Logged | Report this post to a Moderator
Greg Davidson
Member
Member # 3377

 - posted      Profile for Greg Davidson   Email Greg Davidson   Send New Private Message       Edit/Delete Post   Reply With Quote 
Gina, you are wrong.

Goal of the program = economic stimulus and reduction in carbon emissions.

Effect of the program = economic stimulus and reduction in carbon emissions.

Why are you an advocate for a deeper depression and more pollution?

Posts: 4178 | Registered: Dec 2006  |  IP: Logged | Report this post to a Moderator
RickyB
Member
Member # 1464

 - posted      Profile for RickyB   Email RickyB   Send New Private Message       Edit/Delete Post   Reply With Quote 
"Sort of like the FDR administration destroying food supplies during the Depression in order to prop up price controls, even though people were going hungry."

I love this. The good protestants shrug when people go hungry, leaving it to private charity to maybe save them, but then accuses the other side - the one that made sure as many people as possible DON'T go hungry - of starving children.

Sort of like how they pin the brief recession of 1937-38 - the one caused by FDR BACKING OFF from New Deal policies in order to listen to the business sector and balance the budget - as proof that "the new deal didn't work."

"Why are you an advocate for a deeper depression and more pollution?"

Um, not to engage in motive speculation, but the common answer to that is "cause it pisses off the godless libruls."

Posts: 19145 | Registered: Jan 2004  |  IP: Logged | Report this post to a Moderator
G2
unregistered


 - posted            Edit/Delete Post   Reply With Quote 
quote:
Originally posted by Wayward Son:
quote:
So, Wayward Son, when will it be taken care of and the dealers get their money?
Criswell predicts....

pretty soon. [Smile]

Yeah, that really helps when you've laid out over a billion dollars and need that payment. It almost certainly will pay someday. Will the car dealers be able to float their business and cash flow until someday?

This thing is developing too, the National Automobile Dealers Association in Washington, D.C., released a survey of its members that estimated they have submitted claims for nearly $3.3 billion. So what's wrong with that picture? The Cash for Clunkers program is only authorized to spend $3 billion - about $300 million short and counting.

quote:
Originally posted by Gina:
quote:
Originally posted by Wayward Son:
So, G2, once this payment delay is taken care of and the dealers get their money and everybody is happy, what will be the point of this thread? [Wink] [Smile]

To point out that the whole thing is ill-conceived, not to mention poorly constructed and administered, like every other government program.
Exactly. This is a very simple program working within a well defined frameset with a very small subset of the population. And they can't get it right.

It's an administrative nightmare, has run out of money twice now and currently has cost more than twice its original estimate - and will no doubt run over even more. This is the perfect example of government programs and, as I pointed out in my original post, the same people that will run health care. If they can't get a mind numbingly simple program like this right, what makes anyone think they will get the extremely complex and massive health care takeover right?

quote:
Originally posted by Greg Davidson:
Gina, you are wrong.

Goal of the program = economic stimulus and reduction in carbon emissions.

Effect of the program = economic stimulus and reduction in carbon emissions.

Why are you an advocate for a deeper depression and more pollution?

Greg, you are wrong.

Goal of the program = economic stimulus and reduction in carbon emissions.

Effect of the program = poor people and charities lose the opportunity for good cars.

Why are you an advocate for keeping poor people poor and destroying charitable organizations?

[ August 20, 2009, 09:15 AM: Message edited by: G2 ]

IP: Logged | Report this post to a Moderator
TomDavidson
Member
Member # 99

 - posted      Profile for TomDavidson   Email TomDavidson   Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
To point out that the whole thing is ill-conceived, not to mention poorly constructed and administered, like every other government program.
Hyperbole much?
Posts: 22935 | Registered: Nov 2000  |  IP: Logged | Report this post to a Moderator
Wayward Son
Member
Member # 210

 - posted      Profile for Wayward Son   Email Wayward Son   Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
If they can't get a mind numbingly simple program like this right, what makes anyone think they will get the extremely complex and massive health care takeover right?
And what I'm trying to point out is that there is an obvious flaw in this conclusion, one which should be obvious to even the most disinterested observer:

The program hasn't failed yet.

Yes, there are bumps in the road. It's not going as smoothly as it should. And if the money doesn't get moving soon, it could cause real problems. But it hasn't reached that point yet. And it may never get there.

Because of a severe lack of any real failures in the Obama Administration, you are forced to create them. You have to anticipate disaster at every turn, because, so far, there hasn't been any real disasters. This is partly because the Obama Administration has been in charge for a little over 6 months, so they haven't had the chance to fail in a major way. I'm sure, given time, they will fail spectactually, just like every Administration before them.

But you can't wait, can you?

"Nattering nabobs of negativism" is how William Safire (for Spiro Agnew) put it. Of course, many of them were right at the time, and you may be right, too. But you don't know that, now. And crowing about how Obama has failed even before he has is the height of arrogance. And will make you look truly foolish if the program actually succeeds.

I predict that it will. I believe that, once the problems are smoothed out, the money will flow into the hands of the dealers and all of this brouhaha will be forgotten. Yes, some charities will have less income, and some poor people will have more expensive transportation (if they can afford it). But--gee whiz!--nothing is perfect. Someone always loses when there is a change. But ultimately, the program will do what it was intended to do, as Greg pointed out: stimulate the economy and reduce carbon emissions.

I also predict that you will not acknowledge this success. There will be some imperfection, some small problem, that you will point to and declare that this proves it was a total failure. Because that, it seems, is your real point in this thread. To prove that Obama is a complete and utter failure, unworthy to be President, and thoroughly incompetent. And you will keep harping on this idea until the day he leaves office.

Regardless of whether there evidence of this or not.

Posts: 8681 | Registered: Dec 2000  |  IP: Logged | Report this post to a Moderator
G2
unregistered


 - posted            Edit/Delete Post   Reply With Quote 
quote:
Originally posted by Wayward Son:
quote:
If they can't get a mind numbingly simple program like this right, what makes anyone think they will get the extremely complex and massive health care takeover right?
And what I'm trying to point out is that there is an obvious flaw in this conclusion, one which should be obvious to even the most disinterested observer:

The program hasn't failed yet.

Under that definition of failure, no program would ever fail because it just keeps going. Sure, just keep pumping billions into it. Like every other program. Government never fails because you define failure as ending the program.

quote:
Originally posted by Wayward Son:
Because of a severe lack of any real failures in the Obama Administration, you are forced to create them.

You must listen solely to NPR or something.
IP: Logged | Report this post to a Moderator
Wayward Son
Member
Member # 210

 - posted      Profile for Wayward Son   Email Wayward Son   Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
Under that definition of failure, no program would ever fail because it just keeps going. Sure, just keep pumping billions into it. Like every other program. Government never fails because you define failure as ending the program.
Except this is a limited program. It all ready has ended. The dealers are just waiting to get paid.

How can you say it will "just keep going?" [Confused]

quote:
You must listen solely to NPR or something.
Primarily, but that is beside the point. If there are so many obvious failures, why are we talking about a program that hasn't failed yet as a failure?? Why predict disasters when there are so many other disasters to point to?
Posts: 8681 | Registered: Dec 2000  |  IP: Logged | Report this post to a Moderator
JoshCrow
Member
Member # 6048

 - posted      Profile for JoshCrow   Email JoshCrow   Send New Private Message       Edit/Delete Post   Reply With Quote 
Wayward, I think it's worth noting that G2 has never shown an interest in weighing pros and cons of any government program created by Obama. He's never posted anything positive about anything Obama has done, and nobody expects him to, because he has put on a red shirt and sees that the other guy is wearing blue and that is the extent of his interest in the discussion.
Posts: 2281 | Registered: Mar 2008  |  IP: Logged | Report this post to a Moderator
hobsen
Member
Member # 2923

 - posted      Profile for hobsen   Email hobsen   Send New Private Message       Edit/Delete Post   Reply With Quote 
JoshCrow, that generalization about G2 strikes me as probably wrong, and certainly inflammatory. After all, if G2 once wrote he liked a shirt Obama wore, that alone would refute it. Are you sure he has never written anything like that?
Posts: 4387 | Registered: Jul 2006  |  IP: Logged | Report this post to a Moderator
JoshCrow
Member
Member # 6048

 - posted      Profile for JoshCrow   Email JoshCrow   Send New Private Message       Edit/Delete Post   Reply With Quote 
hobsen - although my comment was perhaps abrasive, I think G2 will in fact agree with me that he has never posted anything (of substance) that portrays Obama positively, nor is it his tendency to post a pros vs. cons argument about Obama programs. It may well be that he thinks Obama is simply that bad, or it may be his desire in posting negative threads to balance a perceived favoring of Obama by others, but this is to speculate on motives - my post was only meant to suggest that based on his posting record, G2 is unlikely to be moved by the kind of argument such as Wayward has put forward.

If G2 feels like I'm mischaracterizing his posting record, he's welcome to show me that I'm wrong.
As you suggest, he need only point to a past post (and I'm not referring to backhanded remarks or sarcastic praise here). I would, in fact, welcome being wrong on it.

[ August 20, 2009, 05:06 PM: Message edited by: JoshCrow ]

Posts: 2281 | Registered: Mar 2008  |  IP: Logged | Report this post to a Moderator
FiredrakeRAGE
Member
Member # 1224

 - posted      Profile for FiredrakeRAGE   Email FiredrakeRAGE   Send New Private Message       Edit/Delete Post   Reply With Quote 
One item that was not (I think) brought up so far - what about all of the used parts shops and junkyards? They're paid to destroy the car and to salvage (recycle) the materials. This has two detrimental aspects:

(1) It means that in the future used cars will be more expensive, and used parts will be more scarce. This could affect used auto sellers and auto parts companies.

(2) It means that only those companies that are large enough to meet the Federal requirement for the CARS program will be considered for disposal of these used cars. Combine that with the lack of cheap used parts, and you'll see many smaller used parts places go out of business.

This will result in more new car sales/production, which is the goal of the program. That said, it seems a little two-faced to argue that carbon-based trade caps are great, and to argue that new car production (vs. the use of used cars) is a good thing.

That said, this program *is* stimulating to car dealerships. It has a whole bunch of good and bad side effects -- none of which, I'm sure, were considered by the folks in Washington.

Posts: 3538 | Registered: Sep 2003  |  IP: Logged | Report this post to a Moderator
Mariner
Member
Member # 1618

 - posted      Profile for Mariner   Email Mariner       Edit/Delete Post   Reply With Quote 
Goal of the program = economic stimulus and reduction in carbon emissions.

Effect of the program = economic stimulus and reduction in carbon emissions.


Greg, I question the effectiveness of both of those goals.

First of all, let's look at the environmental side. Initial inputs in manufacturing have a large part to play in the life cycle of cars. So with C4C, you might have bought a car 10 years ago, bought one now, and use the new one for 15 years. That averages out to 12.5 years of driving per car, so the emissions from making the car(s) are spread out across that time. Without C4C, you might put off buying a new car until 5 years in the future, in which case the new car emissions are spread out over 15 years. That could make a huge difference.

Next, you have to consider future technology. If you buy a car now instead of 5 years from now, you are stuck with the MPG of your current car. What you don't know is the MPG of your future car. Suppose breakthroughs in PEVs occur in the next 5 years? Your two options here are:
40mpg car for 15 years, 300mpg care for the rest of your life
15mpg car for 5 years, 300mpg car for the rest of your life.
If you drive 12000 miles per year, the second option actually saves fuel

Finally, while LCA studies generally use the functional unit of CO2/mile, that may not actually be the best standard. This is because people in more fuel efficient cars tend to drive more than people in less fuel efficient cars. Here is one study on this phenomenon, for example. So yes, you'll still directly saving CO2 emissions if you drive 16000 miles in a 40mpg car vs 12000 in a 15mpg car, but it's less savings then what you initially expect. And that may allow the two other considerations above to win out.

Obviously there's not enough information for either of us to come to a definite conclusion about whether or not C4C is reducing CO2 emissions. But these things do call into question your assertion, and I don't think you can be 100% sure about it.

Now, as for the "stimulate the economy" bit:

This is the basic "broken window" fallacy. This is saying that something which undoubtedly decreases wealth, such as breaking windows or destroying cars, can improve the economy. But it's ignoring all the indirect effects. Consider:

- This undoubtedly hurts people on the lower end of the wealth spectrum, as it raises the costs of used cars. Since these people can't afford new cars, they may be stuck. Or they're forced to sacrifice other spending in order to buy new cars. Or maybe upper-middle class parents won't buy their teens going off to college a car, as they're too expensive. Thus the teen is stuck on campus and unable to spend money on worthless trivolities, thereby depressing the local economy. Etc., etc.

Secondly, and more importantly, it ignores the opportunity cost of what to do with C4C money in the first place. This is especially true for the second round of C4C funds. The money was stripped from the energy loan guarantee funds. What does this mean? It means it'll be harder for new alternate energy projects to be funded. These are the sort of projects that are the first ones cut during a credit crunch like this recession. After all, they're unproven technology, and therefore high risk. Personally, I know over a dozen biofuel companies who have dramatically slowed down their commercialization plans after the big crunch last year. These people would love loan guarantees in order to star putting cement on the ground and get their projects running.

At worst, these loan guarantees would be no less stimulating than C4C, as any company that fails is no different than blowing up cars. In fact, in the grand scheme of things, its better, as every failed company tells everyone else what not to do, and thus increases the odds for everyone else. At best, these loan guarantees would be a real stimulus, helping to form stable, long term companies that generate wealth and provide dozens of direct jobs without government funding.

Given the loss of 2 billion dollars of loan guarantees here, I think it's safe to say that C4C has failed in stimulating the economy.

[ August 20, 2009, 08:24 PM: Message edited by: Mariner ]

Posts: 538 | Registered: Mar 2004  |  IP: Logged | Report this post to a Moderator
Greg Davidson
Member
Member # 3377

 - posted      Profile for Greg Davidson   Email Greg Davidson   Send New Private Message       Edit/Delete Post   Reply With Quote 
Dear Mariner,
first, I am very pleased to respond to an informed and reasonable critique of what I said - it's quite refreshing, so thank you.

Environmentally, this is complex (as there is a heavy carbon footprint for manufacturing a car, and in fact the batteries for electric or hybrid-electric cars impose an additional carbon burden that it takes several years to amortize). Nevertheless, I believe that this will have a generally beneficial impact on reducing the growth of carbon emissions because it gets higher polluting cars off the road immediately. I'd accept an argument that the effect will be not be large (this is probably not the best investment if reducing our carbon footprint and dependence on foreign oil are the primary objectives)

quote:
Secondly, and more importantly, it ignores the opportunity cost of what to do with C4C money in the first place.
With respect to the economic impact, I believe we have a difference of opinion because I have a different opinion of what is the root cause of the current economic crisis. I believe that the economy can be subject to a lack of aggregate demand. In a time of economic crisis, such as 1929 or 2008, entrepreneurs see the dramatic reductions in economic activity (and the value of financial assets), and they respond not by investing in newly inexpensive opportunities, but rather by hoarding liquid assets so as to be able to survive if things get worse. This was part of the credit freeze that we faced last Fall. And there is a cascade effect - as businesses become fearful about the future, they cut back on production. Their suppliers -- seeing future orders -- cut back on production, which results in higher unemployment(and both the newly unemployed and those fearful of being unemployed will spend less money, which businesses see, leading them to cut back production even further). Every turn of the cycle leads to less demand for goods and services, which is what I referred to as inadequate aggregate demand. In 1929 when the government took no action, the spiral continued until 1933.

If inadequate aggregate demand is the problem, you need government to stimulate demand to create new orders. Direct government investment addresses inadequate aggregate demand, but something like C4C is even more efficient because each $1 of government funding leverages $3 or more of private stimulus. I used C4C and bought one of the cheapest possible cars in the program, and it still got me to pay $12,600 to stimulate the economy (in addition to the government's $4,500) - for people who bought a more expensive car the program was even more successful.


PS: I'd like to pretend I invented this view of the world, but it's directly from John Maynard Keynes (not to be confused with the so-called "Keynesian" economic theory which differs in some significant ways).

Posts: 4178 | Registered: Dec 2006  |  IP: Logged | Report this post to a Moderator
G2
unregistered


 - posted            Edit/Delete Post   Reply With Quote 
quote:
Originally posted by Wayward Son:
So, G2, once this payment delay is taken care of and the dealers get their money and everybody is happy, what will be the point of this thread? [Wink] [Smile]

As I said yesterday, the National Automobile Dealers Association in Washington, D.C., released a survey of its members that estimated they have submitted claims for nearly $3.3 billion. Over the weekend, we can be pretty sure more will be submitted. The problem is:
quote:
The Obama administration will end the popular $3 billion Cash for Clunkers program on Monday, giving car shoppers a few more days to take advantage of big government incentives.

<snip>

... the administration needed to put a halt to the program to avoid surpassing the $3 billion funding level.

Do you still think the dealers will get their money and everybody will be happy? [Wink] [Smile]

[ August 21, 2009, 10:20 AM: Message edited by: G2 ]

IP: Logged | Report this post to a Moderator
Wayward Son
Member
Member # 210

 - posted      Profile for Wayward Son   Email Wayward Son   Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
Do you still think the dealers will get their money and everybody will be happy?
Yes. [Smile]

I have faith in this program because no one involved wants it to fail. The car companies love it; the dealers love it (once they get paid); and the car buyers love it. And with all those big hitters loving it, Congress and the President love it.

The only ones who are hurting are junk yard owners, certain charities (who saw one of their sources of income curtailed), and the small-government advocates who can't stand to see any government spending at all. (Where were they for the past 8 years, I ask you?)

With all those people wanting to see the program succeed, it most likely will succeed. I heard yesterday that one of the major auto manufacturers--GM, I think--said they would front the rebate money to the dealers until the government gets around to paying them off. So there shouldn't be many bankruptcies of car dealers, if any.

But keep telling us how this program has failed, G2. We'll all be fascinated to see how you try to justify that later. [Smile]

Posts: 8681 | Registered: Dec 2000  |  IP: Logged | Report this post to a Moderator
G2
unregistered


 - posted            Edit/Delete Post   Reply With Quote 
quote:
Originally posted by Wayward Son:
quote:
Do you still think the dealers will get their money and everybody will be happy?
The only ones who are hurting are junk yard owners, certain charities (who saw one of their sources of income curtailed), and the small-government advocates who can't stand to see any government spending at all. (Where were they for the past 8 years, I ask you?)
They were screaming but ignored. Don't confuse Republicans for small-government advocates.
quote:
Originally posted by Wayward Son:
[QUOTE]
With all those people wanting to see the program succeed, it most likely will succeed. I heard yesterday that one of the major auto manufacturers--GM, I think--said they would front the rebate money to the dealers until the government gets around to paying them off. So there shouldn't be many bankruptcies of car dealers, if any.

The government is holding the line on a $3 billion dollar cap - which had already been exceeded. Now you're telling me another government entity, GM, will funnel money to dealers? Where does it end you think? If that happens, we'll never know how much was spent on it. I guess if there's only a few bankruptcies, that's a success?

quote:
Originally posted by Wayward Son:
[QUOTE]
But keep telling us how this program has failed, G2. We'll all be fascinated to see how you try to justify that later. [Smile]

But keep telling us how this program has succeeded, Wayward Son. [Smile]
IP: Logged | Report this post to a Moderator
  This topic comprises 4 pages: 1  2  3  4   

Quick Reply
Message:

HTML is not enabled.
UBB Code™ is enabled.
UBB Code™ Images not permitted.
Instant Graemlins
   


Post New Topic  Post A Reply Close Topic   Feature Topic   Move Topic   Delete Topic next oldest topic   next newest topic
 - Printer-friendly view of this topic
Hop To:


Contact Us | Ornery.org Front Page

Powered by Infopop Corporation
UBB.classic™ 6.7.1