An energy and regulatory expert says a new analysis of the highly touted "Cash for Clunkers" program is yet another indicator of just how inefficient government programs are and how much more they cost than originally projected.
Edmunds.com, an automotive website, has released an analysis that shows a total of 690,000 new vehicles were sold under the Cash for Clunkers program last summer, but only 125,000 of those were vehicles that would not have been sold anyway. According to Edmunds, the government ended up spending about $24,000 each for those 125,000 additional vehicles, even though the average rebate for the vehicles was $4,000. Nick Loris, a researcher in energy and regulatory issues at The Heritage Foundation, says the program did not affect the volume of car sales as much as the timing of the sales. "That doesn't even factor in the fall-in sales that happened in other industries during the time Cash for Clunkers was going on. People had to make cuts elsewhere, so you saw retail trade sales falling during the months that Cash for Clunkers was in place," Loris explains. "And also, if you think about the amount of value that was destroyed, of all the used cars that were destroyed from this program -- factoring those two things in makes this program that much worse." Loris says the idea that the Cash for Clunkers program was a success and that tax dollars are being well-spent on "stimulus" programs that provide funding for more fuel-efficient golf carts and replacing diesel buses with hybrids is a "misnomer" being promoted by the Obama administration.
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