Talk about a "teachable moment"!
The Obama administration has found it tough going in trying to stimulate the American economy -- primarily because the emergency $787 billion "stimulus" bill passed earlier this year mostly stimulated the government.
But now the administration is the victim of its own success in the one area where it actually stimulated the private sector: the "cash for clunkers" program.
On Thursday, the administration first abruptly suspended the program -- which gives federal rebates to people who trade in gas guzzlers and buy new fuel-efficient cars -- then announced Friday the program would operate through the weekend.
The reason for the confusion: The $1 billion program was too successful and appears to have run out of money.
Thankfully, the administration kept it going through the weekend, when most people shop for cars -- and, coincidentally, during Georgia's sales tax holiday. The House moved quickly to put more gas in the program's tank; the Senate is to follow.
Finally, a government stimulus that stimulates!
That should provide the administration with several important economic and political lessons -- primarily that increasing government spending and stimulating the economy are two different things entirely.
This very basic lesson in supply and demand -- and the power of the private sector vs. the government -- was totally lost on the administration and leaders in Congress. That led to brief, but massive confusion for hundreds of thousands of dealers and car buyers on Friday.
The lesson is clear: If Washington is intent on spending money to get the economy moving, the cash for clunkers program is one of the best ways they've tried so far. It not only gets gas guzzlers off the streets, but infuses the much-battered automobile industry with new cash and enthusiasm.
You have to wonder why the government didn't foresee the program's popularity.
And why we should now trust it with health care.
The Augusta Chronicle ©2010 Morris Communications, LLC. All Rights Reserved.
People are receiving taxpayer backed refunds for buying a new car? Stimulating! There's a chance for the financially successful to get some of their money back.
That is why I often say instead of this birther nonsense and fighting healthcare reform when you don't even know what the final legislation is use this recess wisely. Go to these townhalls, write and call your congressmen to get this stimulus restructured. Only a small portion of it has been spent get the rest of it in the hands of the taxpayer quickly. The $8000 tax credit is helping the single family real estate market also. Get money into the hands of the people.
If the "stimulus" weren't taken from the taxpayer initially (so the federal government could redistribute it) then the money would already be in taxpayers hands. Vote the socialist Dems out of office in 2010 and get this horrible experiment out of office in 2012. Save the country.
I guarentee some of these people that have done the cash for clunker and 1st time homeowner program don't pay $12500 a year in taxes. So my point was to put the money in their hands not directly to GM or BOA or whatever corp.
This editorial makes some very valid points, but it doesn't mention the fact that this administration is trying to influnece, and eventually control, the kinds of cars we drive. When I give up my SUV for a smaller car, It'll be my decision - not the government's.
ldmsmith, they are providing incentives. Which is what they should do when it will benefits business and the environment. They should never make you drive a particular car.
It's simply more income redistribution. I'll also bet most of the money goes to buy foreign made cars.
Well foreign based companies have plants in America so that is becoming less and less of a factor. But, I would prefer the money go to American owned companies.
I don't get the AC's point. The program still took government spending, which I thought the AC was against. Once that money runs out and the program is over won't sales just dip right back down?
Yes, they will imdstuf but the govt shouldn't just sick back idly and watch everyone go out of business.
The should never make you drive a particular car, concerned, but when they own the companies, they manufacture what they want you to drive. There's not much of a choice. I don't buy the global warmning/save the environment stuff.
It's not the government's job to bail out failing businesses, either. The government's job is to get out of the way. Let the consumer keep more their hard-earned paychecks and we will drive the economy.
I am not a global warming alarmist either. But I think pollution is a bad thing and should be get to a minimal if possible. The govt has to get involved I believe to save business once unemployment because a factor.
I have yet to hear what the price to have a new battery installed in cars such as the Preis is. Does anyone know? Batteries do wear out ya know.
I think this is a bad idea. They are disabeling 4-5 year old cars, crush them and who is going to suffer, then the poor man that will not be able to find a good used car for less then the new one. Also, I bet you come next year, the $4,500 will be taxable income , same thing happened with all the $300 dollar rebates.I think eliminating the federal tax for a year would do much better for everybody, not only the person that has money to buy cars.
It isn't the taxpayer's responsibility to subsidize people to buy a car or a house. The handout/entitlement crowd never ceases to amaze.