With congressional passage of, and the anticipated signing by President Obama of the “Cash for Clunkers” bill, I decided to visit the local Ford dealer, Lehighton Ford. The most important fact to know now is that the dealers are still pretty confused about this bill, and aren’t sure how it will affect things. Still, here are a few basic facts:
Benefits you will get
1. You can get $4,500 if new car is 10 MPG more fuel efficient than the older car
2. You can get $3,500 if new car is 4 MPG more fuel efficient than the older car
3. This bill sets aside $4 billion for ‘Cash For Clunkers’ program
4. You may trade in or buy a domestic or a foreign vehicleWho is eligible?
1. Only purchase or lease of new vehicles will qualify
2. Clunkers eligible for the program must get 18 MPG, or less
3. Must hold a valid legal title to the car seeking to trade in
4. Registered to the same owner for the full year preceding the trade-inWho is NOT eligible?
1. Cars that have not been insured for the past year
2. Cars that are older than 25 years
3. Cars not in drivable condition
4. New Car manufacturer’s suggested retail price cannot exceed $45,000
Source: cashforclunkersfacts.info. This site’s only internet link is to a car insurance company, so it is trying to sell you something.
Shockingly enough, I agree with Pandagon’s Jesse Taylor, when he calls this, in effect, welfare for the middle class. Since the payment is good only if you buy a new car, it excludes pretty much everyone who can’t afford to buy a new car.
Naturally, Mrs Pico and I talked new cars with the salesman. If we were to do this, we’d trade in my 2000 Ford F-150 into the CfC program. I had already checked on the “official” mileage at http://fueleconomy.gov (that’s where you need to go to check on your vehicle), and my truck is credited with a combined 16 MPG rating. Mrs Pico’s 2002 Mustang is credited with 20 MPG, so her car doesn’t qualify. But Mrs Pico needs a new vehicle more than I do. Not only is my truck in better shape, but that little light rear-wheel drive Mustang is terrible in the winter around here.
So, she’s looking at a Mercury Milan Hybrid. At 41 MPG city and 36 MPG highway (no, those numbers aren’t reversed; that’s what happens with hybrids), the MPG difference above my F-150 is well over 10, so we’d qualify for the $4,500 payment. The solution is simple: turn in the F-150, she gets the Mercury, then trade in the Mustang, and I get another truck. Not exactly in keeping with the spirit of the legislation, but it might well be within the letter of the law. 
Still, I’d rather see this clunker of a law undone, period, even though we could benefit personally. It’s welfare for the well-off, and would do the least for the people who need it the most: people who own really inefficient cars but who can’t afford to trade them in and buy new.
More, and this really frosts me, we just bailed out Government General Motors, and the Treasury now owns 60.8% of GM. Chrysler went bankrupt before being bought out by F(ix) I(t) A(gain) T(ony). What on God’s earth are we doing spending taxpayer dollars to subsidize the purchase of new foreign cars? The commenters on Pandagon rightly pointed out that a lot of Toyotas are built in the US, and a good chunk of the domestic cars we see were built in Mexico, but so what? We bailed out GM, we (helped) bail out Chrysler, we’d have bailed out Ford if Ford hadn’t gotten its act together first. But can you imagine what Americans would have said if President Obama had tried to bail out Toyota?
You want to buy a Honda? Fine, it’s a free country, go right ahead. But the federal government, the taxpayers, shouldn’t be forced to help you do it! This legislation would, in effect, tax poor Americans who can’t benefit from this law, to subsidize better off Americans — that, in itself, is bad enough — to help them to buy foreign cars!
Sorry, but that’s just not right.
Perhaps President Obama can issue regulations to go along with this bill that would restrict it to the purchase of American cars. THis is one place in which we ought to raise Hell to get him to do that.
My letter to the White House:
It will, I’m certain, do no good at all.
No American, rich, poor or whatever should be forced under threat of prison to pay taxes to buy a new car for someone else. Period.
Under the guise of making our environment better, this program is nothing but another taxpayer funded scheme to insure or promote an industry that has refused to change under current free market conditions. By propping up a predominantly union industry, (at the taxpayers expense), this action will only lead to a false sense of security. As Dana mentioned, this action really does nothing to provide help to the middle class who are struggling to make ends meet and have no means to purchase a new car every two years. When the price of gas goes back up to around 4-5 dollars a gallon, (zapping the middle class’s ability to save for big ticket items), financial industrys will again thrive by offering high interest loans and thus the over-extention credit cycle will put the average American in further debt. Enter, another government bailout/”incentive” to reduce a cash stressed economy. In the end, guess who owns your car, your house, your new washing machine? That’s right folks, your govenment. If you liberals think the Patriot Act was an intrusion on your personal liberties, just look ahead to your government owning your health care choices, your home and yes, your car.
Who pays for all this? You will, through the rise of “sin taxes” first, (alcohol and tobacco) and soon soda pop.
And a national gas tax rise is just around the corner. Terms like individual personal responsibility will be a thing of the past, and your government will own you.
Big Government produced the Trabant.
How many members of the Nomenklatura drove one?
Who are the twerps we are putting in charge as commissars? Will there be an Elsworth Toohey award for mediocrity enforcement?
If you folks simultaneously spoke out about taxpayer money being wasted to support a sloppily run DoD, then I might see your point. But I have yet to see a word on this DoD waste on this blog.
I see some benefits from the clunker replacement program. It stimulates American car makers and businesses, saves jobs, and helps in the economy recovery. And, it lowers greenhouse gas emissions. Therefore, I think it is prudent use of taxpayers money.
Dana, in your case, I think your main objection is that you would have a large out-of-pocket expense in replacing two older vehicles with new ones, taking into account the $4,500 subsidy. So for you, this may be unwise.
Two years ago this month, I replaced my 1998 F-150 (Expedition) clunker for a hybrid (Toyota Highlander SUV, and got a $2000 tax write-off from Uncle Sam. Moreover, for my about 15,000 miles per year driving, I went from a 13/17 mpg vehicle to a 27/24 vehicle, i.e., a 1160 gallons/year vehicle to a 600 gallons/year vehicle, a savings of 560 gallons of gasoline each year. Thus, @$3.00 per gallon gasoline, overall I’ve saved a total of $3360 on gasoline and $2000 in taxes, for a total to date of $5360 so far, plus emitting at least 48% less carbon dioxide and other fossil fuel air pollutants, considering both gasoline combustion and gasoline manufacture. For me, it’s been a win-win strategy.
Dana, it might be worthwhile for you to consider getting rid of your clunker, pocket the $4,500 savings on the purchase of a hybrid truck (2009 Chevy Silverado hybrid pick-up; Toyota Tundra hybrid (rumored)), and pocket the savings in gasoline. With all due respect to Mrs Pico and her Mustang, it might be prudent to wait a few more years, until the plug-in hybrid models are better established. In the meantime, keep her in top-grade snow tires!
Perry even if we might differ about whether and how much money is being wasted by the DoD does not mean that such waste subsequently justifies all other waste.
I’m not complaining about how much the program could benefit me; I’m saying that it shouldn’t benefit me. Without getting too specific, the Pico family is in the top ten percent of income tax filers; we aren’t poor! Yet we could take advantage of this program, to the tune of getting a $4,500 federal bene, when most people in the lower half of income can’t take advantage because, even with this program, they can’t afford to buy a new car or can’t get the credit to buy a new car — if not both. This is taking tax money from the less well off to benefit the better off.
I don’t favor income redistribution in any form, but at least I can understand when we tax the better off to help the poor; at least there is the justification that they need the help. But to do it the other way around is mindless.
Nor does it make any sense at all to subsidize sales of foreign cars.
By the way, as far as the dealers know — and their information level isn’t great yet — we could still get the tax write-off for buying a hybrid even with this program.
Rovin: “And a national gas tax rise is just around the corner. Terms like individual personal responsibility will be a thing of the past, and your government will own you.”
Rovin, your entire post is one after another straw man fallacies, for which there is no evidence, only your conjecture, which you then attack.
If we take Obama at his word, the government will get out of the business of the financial institutions and the car companies as quickly as possible. You might not believe that. If the economy improves, and he does not follow through on his commitment, then you might have a leg to stand on.
“If you liberals think the Patriot Act was an intrusion on your personal liberties, just look ahead to your government owning your health care choices, your home and yes, your car.”
Rovin has taken us off topic here, but I must respond.
Regarding healthcare, I personally would rather rely more on the government and less on the private insurers. I simply do not understand how you on the Right can possibly be satisfied by the privately run healthcare business we presently have, when it has so much larger a per capita cost compared to all other developed nations, and delivers less in terms of coverage (50 million uninsured) and outcomes (infant mortality and life span). You folks are not thinking about anything other than ideology!
With the current healthcare battle, we are seeing once more how powerful the health providers are and how embedded they are in our Congress. Perhaps again the private sector will prevail, and the people will continue to suffer. Is this continuation really the outcome you seek and support?
Perry said:
I simply do not understand how you on the Right can possibly be satisfied by the privately run healthcare business we presently have, when it has so much larger a per capita cost compared to all other developed nations, and delivers less in terms of coverage (50 million uninsured) and outcomes (infant mortality and life span). You folks are not thinking about anything other than ideology!
I’ve always had excellent healthcare. I’ve paid my premiums, selected my doctors, recieved top notch care and had zero complaints. If I had a complaint and thought for one minute the care I would receive in another country would be better, I would go there for care. Where do you go for care? Russia? Canada?
That said, I’m sure we can come up with a better system. One that permits freedom of choice without being pigeonholed by government.
Finally, if onlyideology were involved, why would those on the left who freak out every time gov. tries to fight terrorists trust that same gov. with the health and the lives of theselves and their loved ones?
Dana, points taken about the downsides of this clunker replacement program.
But here again, I repeat the upsides I presented:
“I see some benefits from the clunker replacement program. It stimulates American car makers and businesses, saves jobs, and helps in the economy recovery. And, it lowers greenhouse gas emissions. Therefore, I think it is prudent use of taxpayers money.”
In addition, I pointed out my own personal experience, showing the cost offsets, which are considerable. And I am far from wealthy, either in income or accumulated wealth, certainly not near the upper 10% (and never have been), yet opted anyway to make the decision I made, which for me is a money saver in the long run (10 years) as well as making a major personal impact on greenhouse gas emission reduction and demand for oil.
Like any policy, we have to net out the good with the bad. In addition to the cost savings features of the clunker policy, I happen to value greatly the greenhouse gas emissions reductions, for the sake of the future of our planet.
JohnC: “That said, I’m sure we can come up with a better system. One that permits freedom of choice without being pigeonholed by government.”
This is exactly what those in the House are trying to work out, John, a public insurance option as an alternative choice. Someone like yourself, who is happy with your health insurance, would undoubtedly choose to remain with what you have, perhaps at lower cost, as lowering healthcare costs is another objective. I just don’t want the private entities to get their way again, because doing so in past decades has brought us to where we are right now, which is totally unsatisfactory for most of our population.
Over 70% want a new approach to healthcare, according to recent polling!
JohnC: “No American, rich, poor or whatever should be forced under threat of prison to pay taxes to buy a new car for someone else. Period.”
John, this statement could be made for any number of programs, like making war on a sovereign nation that did not attack us.
So your statement does not carry much weight with me. If we don’t like something Congress or the President has done, then we take care of it at election time, which I certainly did myself last November.
This program sucks. My car already gets 30 mpg. I want to replace it with something fast, like a Corvette. Why shouldn’t the government give me free dough, too? True, I wouldn’t be saving any gas this way, but think of the time saved off my next run to California or Florida! Saving time should be worth as much as saving gas …
Perry, that statement should carry great weight for all Americans. Social problems and their solutions is not the same as war. I too, was not for war in Iraq. That said once we are in a war the only acceptable outcome as a nation is victory. Social problems are not war. I am not your enemy. I may be your political rival but my desire is freedom and justice for all Americans and I would vote for no law which restricts either for you or for myself.
By they way Perry, the very fact that all government solutions to all problems necessarily means force, intimidation and coercion is the very reason government should be our last resort, not our first. No insurance company can force you to buy their product, government can force you to do anything it wants.
John, that’s because government is an elective body that makes laws, which goes back to the outcomes of elections, assuming of course that the elections are flawlessly run, which we know has been in question, especially in recent years.
The problem with the current health insurance industry is that they can exclude whomever they want from coverage, and they can negate decisions made by doctors. They can also conspire with other companies on premium costs. It is problems like these that need to be solved, because insurance companies have not stepped up to do so themselves. A public insurance option would stand these people straight up!
“I may be your political rival but my desire is freedom and justice for all Americans and I would vote for no law which restricts either for you or for myself.”
I would agree, but to a point, that being that Congress has an important oversight responsibility, to assure that the behavior of the private sector is within the law and not predatory. It is this responsibility that was neglected re the oversight of Wall Street. We can now see once again the damage that can be done by unbridled powerful entities. Certainly it can go both ways with the government becoming to overbearing, which just emphasizes the point that we must always seek an appropriate balance.
I again agree. However, those undridled powerful entities were all regulated by government agencies. And none of them could force you to take a mortgage, buy a single share of stock, use their insurance or purchase their cars.
Now the government stepped in and has forced me to “buy” GM stock, is taking person “A’s” hard earned paycheck and giving it to person “B” to buy a car and so on. Yes, balance is good but our default must remain the most freedom for the individual. Even when they make mistakes, fail or we disagree with them.
Like, for example, government.
PJ O’Rourke put it best – “Giving power and money to government is like giving whiskey and car keys to teenage boys”
“The problem with the current health insurance industry is that they can exclude whomever they want from coverage”
By this I presume you mean excluding pre-existing conditions. No resposible insurance company can “buy a claim.” That would be a legal liability because of the feduciary relationship to their stock holders (or policy holders if a mutual company). You can’t buy auto insurance AFTER you hit the tree or life ins. a day after you die. Same with health ins. Once you are ill it’s too late.
Now, perhaps a pre-existing pool could be set up wherein all insurance co’s. must draw a certain number from for each specified number preferred customers. Just like the “high risk pool” states have for drivers.
“and they can negate decisions made by doctors.” This can be a problem. But when Dr’s. order 20 tests to practice defensive medicine from law suits what do we do?
“They can also conspire with other companies on premium costs.” Maybe, but I see most rates dictated by state law and competiton rather than collusion. I can’t prove it, it’s just an observation experienced when shopping for health insurance last year.
But I do believe most of the items we hashed out here could be determined for our betterment amongst the parties with gov. arbitration rather than turn the whole shebangs over to bureaucrats who, in all reality don’t really give a damn.
Perry Said: “The problem with the current health insurance industry is that they can exclude whomever they want from coverage, and they can negate decisions made by doctors. They can also conspire with other companies on premium costs.”
Then try to solve these issues. Set some regulations pertaining to these issues. There is no proof that a public option would solve the problems of the health insurance industry anyway. They would need to be able to negotiate lower drug prices with big-pharma to even be able to offer an option that is cheaper than what private carriers are offering. If they can’t the public option wouldn’t be much cheaper so why would anyone switch to it?
And don’t we already have public health insurance options for the poor and lower-middle class? Why not expand the qualifications for Medicaid making it available to more people and fine tune the way payments are made to doctors, hospitals, etc. to make it more appealing to be accepted. I know in Delaware we have a program to cover children that is low-cost for working parents who aren’t offered health insurance at their jobs (I think it’s $25 a month.) My point is there are options already out there if people care to take the time to research it. So who are these “uninsured” that we keep hearing about? The only segment of the population that comes to my mind are illegal aliens. And they should not be covered under our tax-payer funded “public” options anyway!
Bottom line is I want the goverment as small, inexpensive, limited and short-reaching as possible. The government can’t seem to get anything right – what makes anyone think they’ll get it right with this?
John wrote, and touched on the essential conundrum in a democracy and a free society:
What we don’t like to admit is that freedom and democracy, equality and liberty, are, in fact, very much in opposition to each other. Democracy means majority rule, but majority rule is inherently incompatible with freedom; the minority is compelled to do as the majority wishes, curtailing their own freedom. Likewise, liberty and equality are diametrically opposed: the more liberty we have, the more our innate inequalities come to the surface. Some people are simply smarter, stronger, quicker, more driven, more goal oriented, than others; in a society of perfect liberty, their superiority in the things that produce economic rewards will assert itself. To promote equality, liberty must be restrained, because the only way to raise the less able is to suppress or take from the more able.
I agree with that bottom line 100%. Especially as it applies to the Federal Gov’t, where we citizens (subjects?) have the least control.
If we are to have “socialism” and “Big Government”, I’d far more prefer to see it done at the state, or better yet, local level. If liberal Massachusetts wants to institute a form of gov’t run health care (as they did under Mitt Romney), then fine. If this raises tax rates too high, people vote with their feet and move to a state with lower taxes. Once the Feds get involved, what “choice” is left, other than to leave the country?
JohnC and NosyNeighbor both make some good points, and these should be part of the debate going on in Congress as we speak. But let me choose a couple to comment on.
NosyNeighbor: “There is no proof that a public option would solve the problems of the health insurance industry anyway.”
But there is, NN, and that is the ‘Federal Employees Health Benefits Program’, which includes a public option along with a list of private options. This plan is said to be the finest in the country. Read through it and see what you think.
http://www.opm.gov/insure/health/
“They would need to be able to negotiate lower drug prices with big-pharma to even be able to offer an option that is cheaper than what private carriers are offering. If they can’t the public option wouldn’t be much cheaper so why would anyone switch to it?”
But NN, Canada has been very successful at negotiating much lower drug prices with big pharma, as people in the border states with Canada know very well and take advantage.
JohnC: “Yes, balance is good but our default must remain the most freedom for the individual. Even when they make mistakes, fail or we disagree with them.”
I agree with this sentiment, while recognizing that there are a significant number of people out there who, due to no fault of their own, find themselves in need, especially during these difficult times. Therefore we need to identify these people and reach out our hands to help, even if it needs be our government acting as our surrogate.
NN: “Bottom line is I want the goverment as small, inexpensive, limited and short-reaching as possible. The government can’t seem to get anything right – what makes anyone think they’ll get it right with this?”
I agree with the stated goal. We need to fix our government by being informed, then by electing competent people to run the government. The government gets to be too big when we neglect our citizenship responsibilities and our duties to be active in our local communities.
When the best we can do is to get 50% out in the national election years, and maybe 30% out in local elections, even fewer in school board elections, that says a lot about us! By default then, we get big, overarching government, and we get corruption in our corporations and in our government, often colluding together for their own self interest.
Take the current healthcare debate in Congress, for example, as a classic case of corrupt behavior. How much of the debate centers on the needs of the American people, I ask you?
We have a patriotism/attitude problem in this country in which ideology too often trumps reason, and service to country is better for others to take care of, not us!!!
Dana Pico is correct in that freedom and democracy are at odds. That is why our Founding Fathers set up a constitutional republic and not a democracy. Under our system each citizen is provided equal justice under the law thereby, at least in theory, there can be no tyranny by the majority.
Also equality and liberty are not at odds. Equality of OUTCOME would be at odds with liberty but there is no such guarantee. The equality we do have is that within our liberty we are all equal to pursue our own ends and desires to excellence (there’s a word we don’t hear much any more).
As has been pointed out by Ezra Klein, the US already has a fully socialist health system that works better than private insurance – the VA.
Sorta puts paid to all the bleating about the US’s unique characteristics which would render public systems impossible.
See here.
No doubt the next time conservatives get into power, they can starve it of funds and destroy it with nonsensical regulations – and then use it to show why socialised medicine can’t work…
But NN, Canada has been very successful at negotiating much lower drug prices with big pharma, as people in the border states with Canada know very well and take advantage.
Yes, and countries besides Canada also negotiate for lower prices from our drug companies. So what? Do you think the lobbying groups here are going to roll over and allow the same for our government? Think again, Perry! It ain’t gonna happen!
Phoe, my late father-in-law was in the Veterans Administration health care system, and I’d say that you are absolutely right: it is a very precise model of what single-payer would be like in the United States. Oh, it was free to him, certainly enough, but the VA Hospitals I have seen (Lexington, Kentucky, Hampton, Virginia and Huntington, West Virginia) were about as depressing a places as you’d ever want to see.
The VA Hospital in Lexington was adjacent to the University of Kentucky Hospital, where I worked while in grad school. A brand new, red brick building, clean, spacious and utterly depressing. The VA Hospital in Hampton is set right on the Chesapeake Bay, just a beautiful location, spacious lawns and beautiful views of the bay, and it’s still a place with death in the air.
Phoe, my late father-in-law was in the Veterans Administration health care system, and I’d say that you are absolutely right: it is a very precise model of what single-payer would be like in the United States. Oh, it was free to him, certainly enough, but the VA Hospitals I have seen (Lexington, Kentucky, Hampton, Virginia and Huntington, West Virginia) were about as depressing a places as you’d ever want to see.
Did you read the link, Dana? When were you last there?
My father-in-law died in 1996; that’s when we were last at the VA. Reports are one thing; personal experience is quite another.
My father-in-law died in 1996; that’s when we were last at the VA. Reports are one thing; personal experience is quite another.
Uh-huh.
More things that might be news to you:
i, Bill Clinton is no longer President.
ii, Chinese Democracy has finally been released.
iii, The Columbia is no longer flying. Don’t ask.
iv, Investing in the stock market is not quite as great as it was.
v, Genesis are no longer together.
I hope this shock of all these current events hasn’t been too difficult for you.
[...] called C4C welfare for the well off, and that’s exactly what it was. The homebuyers tax credit is the same thing, more borrowed [...]