cash for clunkers good or bad idea?

[zephramc]

Bad idea.

• The government (taxpayer) took on an additional $3B of debt. Of course the $3B is only regarding the cars. There were some 1,100 people hired to handle the C4C program. The losers again are the taxpayers.
• The consumers who purchased the cars took on additional debt which they may or may not be able to afford.
• Many good cars (the engines at least) were (or will be) destroyed.
• The environment will likely see no benefit.
• Demand was stimulated only for the short term. Auto sales over the next few years will likely be down by about the same number of cars sold while the C4C program was active.

Really nothing long-term was gained by this program. Several billion dollars of assets (cars) were destroyed. These assets still had value and would have been in use for many more years. In exchange for the destroyed assets, we (the taxpayer) received several billion dollars of debt.

How about a "cash for cash" program. I trade in my old worn out Benjamin for a freshly minted Benjamin and a new, crisp Hamilton to go along with it. You want a short term stimulus, the does nothing or worse than nothing in the long term, there ya' go.