Congress Just Buying People Cars Now

http://www.economist.com/blogs/freeexchange/2009/07/congress_just_buying_people_ca.cfm

by colins_pride • 17 years ago

17 28 17 years ago

economist.com

andreyf• 17 years ago

Cars? People still buy those things?

I wonder how much non-drivers' taxpayer money goes to subsidizing others' choices of transportation like this...

jacquesm• 17 years ago

The don't mod down if you disagree rule here isn't doing too good lately :)

Anyway, Yes, people still buy cars, that's for sure. Not as much as before, it is one of the industries that is hit hardest by the so called crisis. The theory goes that if the car industry can be rescued at least when we get out of this crisis the recovery will be a bit quicker.

Good point about the non-drivers' taxpayer money though, I hadn't thought about that at all. It's not an obvious point and - as a driver - I would feel uncomfortable about using such a subsidy but then again I have tried hard to stay away from subsidies as much as I can.

My theory is that subsidies are a subtle way of getting in to an unsustainable situation, it's living above your means by another name.

Sure, everybody else does it but that doesn't mean it is a good thing. Some subsidies I can see the point of, such as subsidized housing or food for people below the minimum income level required to have a chance to get out of that situation. But even there there are two sides to the coin, for some that works well, others lose their self respect because of receiving the money and give up altogether.

There are no easy choices these days, 'cash-for-clunkers', even if it is asymmetrical and will not have the positive effect on the economy that the pundits claim it will have has some positive side effects. Transportation is one of the major engines of the American economy, what with the government now being a large - and somewhat involuntary - shareholder in a car company you can't really blame them if they want to at least improve the market for vehicles so they can recover some of the money through the backdoor and create the right conditions for an exit.

Another downside of the cash-for-clunkers program is that it moves sales that would have happened anyway into a shorter window of time nearer to the present. The usual effect of such an activity is that it will be followed by a slump.

nazgulnarsil• 17 years ago

good to see people arriving at reason from various angles. subsidies are zombie demand that encourage malinvestment from the private sector.

jamiequint• 17 years ago

Easy to say that if you live in a densely populated city with good public transit. Not everyone has the luxury of living close to public transportation or within walking distance of all necessary services they need.

jrockway5• 17 years ago

It is not a luxury, it is a conscious decision that many people make sacrifices to obtain.

mmt2• 17 years ago

It seems less like a luxury and more like a burden, but, then, I love the suburbs.

jsz02• 17 years ago

Wouldn't tax dollars spent on sidewalks and mass transit be subsidizing others choice of transportation also?

jrockway5• 17 years ago

$4500 pumped into buying you a car is good for you, and slightly good for the environment; but investing $4500 into public transportation benefits hundreds of people, and is even better for the environment. Since we don't have much money, it's best to use it in a way that will have the most benefit.

josefresco3• 17 years ago

Not everyone is a smart-ass college kid who lives in NYC. Some people actually need to drive (and have kids), and can't show up at a clients office to sell them web services on a public transport bus.

scythe• 17 years ago

I can't imagine it does any good for the environment, at least not until >five years from now. Producing a car isn't exactly easy on the environment, and requiring people to buy new cars isn't going to help.

bmj3• 17 years ago

Producing _anything_ isn't easy on the environment.

pbhjpbhj2• 17 years ago

How about locally hand-built wooden furniture from sustainably managed forest - it sequesters carbon and provides often beautiful goods is relatively labour intensive (good for employment figures) and preserves traditional skills. Well managed forest will preserve the natural living environment of many species.

Bonus points if the carpenter eats a low animal-protein diet.

jrockway5• 17 years ago

Can I have a $4500 voucher for a new bicycle? It uses no fossil fuel at all. (I estimate that an 18-pound bike will cause me to consume one less banana per week, compared to my current 21-pound bike. This will save hundreds of bananas per decade.)

pbhjpbhj2• 17 years ago

I hope those bananas are fairly traded?

josefresco3• 17 years ago

I wasn't aware that banana consumption was a problem or that America depends on a healthy bike industry to thrive. News to me!

jrockway5• 17 years ago

I wasn't aware that having a slightly-old car was a problem.

marze2• 17 years ago

What we have here is a wasted opportunity.

This program could have required a 10 mpg improvement and could have been set up to require at least 28 mpg on the new vehicle, by using two different numbers, and it would still be very successful and have made the US less dependent on foreign oil imports. Oops.

Too much influence have the firms that make "campaign contributions".

josefresco3• 17 years ago

This isn't about the environment, it's about the economy. The enviro-aspects are simply a bonus and helped get this stimulus plan passed. If it was too restrictive less people would have qualified thereby killing any economic benefit.

marze2• 17 years ago

That's all good, but if you read carefully you'll see I made no mention of the environment in my post, which was focused on the national security benefits to being less reliant on foreign oil.

tybris• 17 years ago

Congress... *siiiiiiiigh

jzachary2• 17 years ago

This program is about keeping consumerism alive to benefit the economy, not about fuel efficiency, The idea of trading in clunkers for fuel efficient vehicles is a thin veil to the real goal of getting people to buy things from an industry who lobbied the government to give them a handout. Instead of Goldman Sachs and Bank of America, the robbers this time are car dealers.

Congress Just Buying People Cars Now

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