October 29, 2009

Prosperity: Cash For Clunksers Only Cost Ya $24,000 Per Vehicle
— Ace

Because many of those vehicles would have been sold anyway. The true cost is the cost for each vehicle that was sold that otherwise wouldn't have been.

$24,000 bucks per car.

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 an analysis released Wednesday by the automotive Web site Edmunds.com.

Still, auto sales contributed heavily to the economy's expansion in the third quarter, adding 1.7 percentage points to the nation's gross domestic product growth.

...

But the overwhelming majority of sales would have taken place anyway at some time in the last half of 2009, according to Edmunds.com. That means the government ended up spending about $24,000 each for those 125,000 additional vehicle sales.

And now the program ends, and not only is there no crazy cash giveaway anymore to continue these sales, but in fact some number of cars were merely bought earlier than they would have been.

Which means they won't be getting bought in subsequent quarters.

Oh, and, by the way, GMAC, GM's credit arm, only wants another paltry $6.5 billion bailout to keep going.

Which they'll get, of course.


Posted by: Ace at 09:23 AM | Comments (72)
Post contains 226 words, total size 2 kb.

1

wOOt

Posted by: Vergeltung at October 29, 2009 09:25 AM (jttPx)

2 And money people spent on cars is money they didn't spend on other things, like houses, appliances, etc. Ford and Toyota thank you. The UAW owners of GM and (gack) Chrysler, well, they think you didn't get the message last time so they're gonna try to get Barry and Nancy to hit you with the stimulus-stick again.

Posted by: mrkwong at October 29, 2009 09:25 AM (G8Eo0)

3 Claiming that it cost taxpayers $24,000 per vehicle is racist!

Posted by: TheQuietman at October 29, 2009 09:26 AM (1Jaio)

4 Sometimes, you just gotta say I told you so.

But the spin will still be the MOST BESTEST GOVERNMENT PROGRAM OF ALL TIME!!!!!!!111!!!11!!!

Posted by: CUS at October 29, 2009 09:26 AM (wOGfT)

5 But but but...it's a huge success! The unicorn in my pants said so!

Posted by: The slacker in mommy's basement at October 29, 2009 09:26 AM (RD7QR)

6 See, the value of those cars went through the roof! Prosperity for all!

Posted by: MSM at October 29, 2009 09:26 AM (WKOg4)

7 Oh yeah.  And all these cars were from inventory, so no new workers were hired to service the demand.

Posted by: CUS at October 29, 2009 09:27 AM (wOGfT)

8 I've heard of "V"-shaped recessions, and "U" shaped recessions; welcome to the "___^_______" underline-shaped recession....

Posted by: ParisParamus at October 29, 2009 09:28 AM (aYS5W)

9 The leaches better enjoy it. After 2010 the pity party will be over. Good riddance to bad trash.

Posted by: maddogg at October 29, 2009 09:29 AM (OlN4e)

10 This is past ridiculous. Time to storm the fucking Bastille.

Posted by: Wilhelm Klink at October 29, 2009 09:30 AM (bjqWr)

11

the worst part of it is they (the car dealers) could not use the "clunkers" for parts cars and the like. had to destroy engines, etc. what a moronic liberal program that was.

 

Posted by: Vergeltung at October 29, 2009 09:30 AM (jttPx)

12 3.5% - 1.7% = 1.8% growth excluding cash for clunkers.
Wonder what the % growth  is minus the housing incentives?

Posted by: Dr. Spank at October 29, 2009 09:31 AM (muUqs)

13 barry plans to give every senior a free $50k government coffin after nancy passes health care. "Converted" from unsold GM cars.

Posted by: Kyle Canyon at October 29, 2009 09:33 AM (Oxen1)

14 12 3.5% - 1.7% = 1.8% growth excluding cash for clunkers.
Wonder what the % growth  is minus the housing incentives?

Posted by: Dr. Spank at October 29, 2009 02:31 PM (muUqs)

I think you're probably into the negative numbers at that point.  Proving, of course, that math is racist...

Posted by: Nighthawk at October 29, 2009 09:33 AM (OtQXp)

15 Hey, we've got an idea -- give people money for the clunkers they will have when the cars they bought with Cash for Clunkers wear out! It's just crazy enough to work!

Posted by: Nobel Peace Prize Committee at October 29, 2009 09:34 AM (RD7QR)

16
Please sell Jeep.  Please please please.

Posted by: Dang Straights at October 29, 2009 09:35 AM (Haq+B)

17 If I eat enough, can I become too big to fail? I like GM's business plan. Let the gubmint call the ownership shots and don't worry about profits or losses. The gubmint will pick up the tab.

Posted by: George Orwell at October 29, 2009 09:35 AM (d9zq2)

18
Didn't a lot of Republicans vote for adding funds to this stupid program?


Posted by: Tweet Verbal at October 29, 2009 09:35 AM (9X3KM)

19 Please sell Jeep. Please please please. Yes. GM and Chrysler can die, just save Jeep and the Corvette. And don't do a Saturn on Jeep, either, spin off their factories too.

Posted by: Nobel Peace Prize Committee at October 29, 2009 09:37 AM (RD7QR)

20
Does this mean anything to Snowe and Collins?

Do they read this and say, "Damn, we got had!...again."


Posted by: Tweet Verbal at October 29, 2009 09:37 AM (9X3KM)

21 3.5% - 1.7% = 1.8% growth excluding cash for clunkers.

Math of course stolen from somewhere else:

$1.4t deficit to buy for $100b increase in GDP.

Posted by: CUS at October 29, 2009 09:37 AM (wOGfT)

22 Die, sock!

Posted by: joncelli at October 29, 2009 09:37 AM (RD7QR)

23
Does this mean anything to Snowe and Collins?


They don't answer the phone for Reality, only History.

Posted by: Dang Straights at October 29, 2009 09:38 AM (Haq+B)

24 It costs the government $24,000 to give away $4,500....

That is definitely the efficiency we need to streamline our soaring health care costs.

Posted by: kefka at October 29, 2009 09:38 AM (n1uMU)

25    20
Does this mean anything to Snowe and Collins?

Do they read this and say, "Damn, we got had!...again."

Readn' shit's overrated.

Posted by: Olympia Snowe at October 29, 2009 09:38 AM (muUqs)

26 I have gone from a Chevrolet man to a man who is waiting gleefully for the moment the bloodsuckers are raked into the fire to sizzle to crispy. Fuck those shameless parasites. Do they think they will sell cars to the people whose pockets they helped pick? Will they sell cars to the limousine liberals who would not be seen dead in one of their subsidized contraptions? They can put a not slip death grip lip lock on my love muscle.

Posted by: maddogg at October 29, 2009 09:39 AM (OlN4e)

27 "... minus the housing incentives?" And don't forget all the remodeling of government buildings and resurfacing of roads, etc. All the the money is being spent to make it look like there is economic activity. But really the money is going to temporary jobs and are actually inflating prices for good and services that might have dropped to a point where they became affordable without intervention. And there will be no return on any of the expenditures! The only place Keynesian economic works is in public works projects that increases economic activity in the long term: hydroelectric, new ports, etc. What a farce.

Posted by: runninrebel at October 29, 2009 09:39 AM (i3PJU)

28 CUS at October 29, 2009 02:37 PM (wOGfT)

Multipliers!

Posted by: lorien1973 at October 29, 2009 09:39 AM (IhQuA)

29 I'd like to announce my new political party. It's called the "No, and Fuck You" party. Who wants in?

Posted by: tachyonshuggy at October 29, 2009 09:40 AM (yUybe)

30 It costs the government $24,000 to give away $4,500.... Welcome to Smart Power and the historic Pezzydency.

Posted by: George Orwell at October 29, 2009 09:40 AM (d9zq2)

31
Speaking of Snowe & Collins...

I'm awaiting for Scozzafava to make the announcement that she didn't leave the Republican party, the Republican party left her.


Posted by: Tweet Verbal at October 29, 2009 09:40 AM (9X3KM)

32 How does that work again Kurt?

Posted by: Todd ( just a guy) at October 29, 2009 09:40 AM (LLOGQ)

33 24  -- This should make the makers of aspirin quite happy.

Posted by: unknown jane at October 29, 2009 09:41 AM (5/yRG)

34 21  $1.4t deficit to buy for $100b increase in GDP.

The debt actually increased by 1.8 trillion this year. A lot of shit is off the books.

Posted by: Dr. Spank at October 29, 2009 09:42 AM (muUqs)

35 I'd like to announce my new political party. It's called the "No, and Fuck You" party. Who wants in? Unite with the Fuck You and the Horse You Rode In On Party and you've got my vote.

Posted by: joncelli at October 29, 2009 09:42 AM (RD7QR)

36 "No, and Fuck You" party.

Ahhnold called.  He's in.

Posted by: CUS at October 29, 2009 09:43 AM (wOGfT)

37 Just wait till the people who wouldn't have otherwise bought a new car start defaulting on their payments.  That'll be some good times.

Posted by: Peaches at October 29, 2009 09:44 AM (9Wv2j)

38 Hmm let's see  the additional 125,000 amounted to 1.7% of the 3.5% increase in the GDP last quarter and we know those are simply sales from the next 2 quarters being made early. So, wouldn't it be logical to say that the GDP for the next 2 quarters is already -.85% for each quarter?

Stimulus bills are like swimming in cold water. Refreshing, but it inevitably leads to shrinkage.

Posted by: Rocks at October 29, 2009 09:44 AM (Q1lie)

39 How about the "Fuck you, and fuck you harder Party?"

Posted by: George Orwell at October 29, 2009 09:46 AM (d9zq2)

40 I am extremely pissed over this sham. Extremely pissed.

Posted by: maddogg at October 29, 2009 09:46 AM (OlN4e)

41 I've lived in Detroit, and I know the people building these cars. I've been rocking German since '95. Ya feel me?

Posted by: Navin R Johnson says listen to The Descendents at October 29, 2009 09:47 AM (J7/Ud)

42 Seriously when did the country get the attitude that government can waste as much money as possible as long as they don't screw things up too badly? 

Posted by: Just Another Poster at October 29, 2009 09:48 AM (NgoAe)

43 Ace, what's a "clunkser"?  Is that like a "suckser"? only with more junk in the trunk?

Posted by: Russtovich at October 29, 2009 09:49 AM (ZXGQD)

44 I'm considering a John Cooper Works  Cooper mini. As long as there ain't no Government Motors parts in the damn thing.

Posted by: maddogg at October 29, 2009 09:49 AM (OlN4e)

45 They still build cars in Detroit?

Posted by: Rocks at October 29, 2009 09:49 AM (Q1lie)

46 Actually, the debt increased by 1.9 trillion, according to the headlines in the sidebar.

Posted by: Dr. Spank at October 29, 2009 09:50 AM (muUqs)

47 Clunksers are what scrunts drive.

Posted by: Rocks at October 29, 2009 09:50 AM (Q1lie)

48 Jake Tapper needs to ask the Presdiddly how many basis points he's going to raise the Federal Funds rate now that the economy is going like gangbusters.

"50 basis points, Mr. President? 100? What's the number going to be?"

Posted by: Iskandar at October 29, 2009 09:51 AM (u1pln)

49
Unite with the Fuck You and the Horse You Rode In On

Glad I'm not the only one...

Posted by: The Chicken at October 29, 2009 09:52 AM (Haq+B)

50 My car dealer friends told me that since they had only X amounts of cars that qualified in inventory there was no incentive for them to deal on price.  The chumps that bought cars thought they were saving $4000, but at least half of that went to the dealers.  So surprise suckers!  Good luck with that 20k car loan.

Posted by: dan in michigan at October 29, 2009 09:52 AM (88w67)

51 I think Dede Scousfasso±qøun eats 2 clunksers every morning for breakfast.

Posted by: Dr. Spank at October 29, 2009 09:54 AM (muUqs)

52 I only want to buy cars from Hammond Motors.

Posted by: Jim at October 29, 2009 09:54 AM (E725N)

53
Jake Tapper needs to ask the Presdiddly how many basis points he's going to raise the Federal Funds rate now that the economy is going like gangbusters.

Can you imagine the stumble-fuck answer this jackhole would give?  He doesn't know wtf P/E ratio is, he couldn't answer this to save his life.   Then if Jake had any balls he would follow-up with inflation.

Posted by: Dang Straights at October 29, 2009 09:55 AM (Haq+B)

54 I suggest the cost/vehicle sold is higher. Should we not add the value of the vehicle traded in and destroyed?

Posted by: joey buzzard at October 29, 2009 09:58 AM (jbXDH)

55

Everyone should buy from Eastern Motors.  Shit is strayt cash, yo.

Posted by: Dang Straights at October 29, 2009 09:59 AM (Haq+B)

56 Clunkser?  Sounds like a Skandii delicacy.  Like Lutke Fish

Posted by: CUS at October 29, 2009 10:04 AM (wOGfT)

57 Using liberalesque comparison logic... Cash for Clunkers cost as much as the F-22 program needed to continue.  So essentially, we trashed a bunch of perfectly operable cars and trucks in order to keep a bunch of older fighters flying in the sky.

Idiots.

Posted by: dutchcedar at October 29, 2009 10:08 AM (0gYrQ)

58 45 They still build cars in Detroit?

Not really.

The "car building" thing is really just a giant a front for bribe money going to the UAW.

Remember- if you're driving an American car, you've helped a union member finance their vacation home in Florida!

Posted by: shibumi at October 29, 2009 10:09 AM (OKZrE)

59

Oh, and, by the way, GMAC, GM's credit arm, only wants another paltry $6.5 billion bailout to keep going.

 

If they do bail them out they will have to do it with some of that Tarp money that Taxcheat Timothy is hiding. The people are already angry over bailouts and will not stomach another one. He will have to do it on the sly. It will get done on a Saturday afternoon when two high ranked undefeated college teams are playing against each other.

 

Posted by: Vic at October 29, 2009 10:12 AM (CDUiN)

60

That $24,000 doesn't include the value of the perfectly good 'clunkers' they destroyed.  Probably closer to $35,000 per vehicle.  What a joke.

And they think it was a success.  God help us!

Posted by: Roy D Mercer at October 29, 2009 10:37 AM (kNiZP)

61 Sorry, joey buzzard - didn't see your post.  You're right.

Posted by: Roy D Mercer at October 29, 2009 10:39 AM (kNiZP)

62 It costs the government $24,000 to give away $4,500

We now know the "Keynesian Multiplier"!  0.1875!

Huh, who'd have thought (other than idiots like Krugman) that it would be <1.

Posted by: leoncaruthers at October 29, 2009 10:55 AM (PH0UW)

63 Time to open a repo business . The defaults on this are going to be staggering .

Posted by: Bill D. Cat at October 29, 2009 11:08 AM (vKdhq)

64 Oh, and don't forget, the majority of cars sold during the Cash For Clunkers Program were Japanese.

Posted by: runningrn at October 29, 2009 11:20 AM (qP2BK)

65 Oh, and I saw this in the paper the other day.  Ford's outlook is improving.  Now the labor unions want to renege on concessions they made earlier when Ford was circling the drain.  These unions are going to be the death of all manufacturing in the U.S.  You would think these idiots would have learned from what happened in Seattle with Boeing.

Posted by: runningrn at October 29, 2009 11:22 AM (qP2BK)

66 Miss me yet? Oh the good old days....
watch the price of oil rise, ladies
and say you love me

Posted by: Grumpy Old Carter at October 29, 2009 11:42 AM (4FkTt)

67 Oh, and, by the way, GMAC, GM's credit arm, only wants another paltry $6.5 billion bailout to keep going.

I would like to point out that GMAC is now owned by Cerberus, not GM. They sold it to them back in 2006. I'm still pissed about the GM bailout, however this new request is coming from Cerberus, not GM.

Posted by: Mandy P. at October 29, 2009 12:44 PM (MK6Kx)

68 The thing that got me is that rather then just repeating the line that the program was a success the DOT guy had to attack Edmunds.  This is true in all liberal arguments, there not based primarily in facts but in partisan hate and attacks.

"It is unfortunate that Edmunds.com has had nothing but negative things to say about a wildly successful program that sold nearly 250,000 cars in its first four days alone," said Bill Adams, spokesman for the Department of Transportation.

This really is a government of whiners and children, top to bottom!
David

Posted by: LifeTrek at October 29, 2009 12:59 PM (tJTIW)

69 Naturally, nearly all the cars sold during the "Cash 4 Clunkers" program were merely advanced sales from the next 12 months.  As others have noted, the economic loss caused by the destruction of wealth (the "clunkers") must be added to the cost factor.

The program did at least prove one thing:  if you offer people free money, they will line up for it.  That most or all dealers copped a major share of the "rebate" by avoiding discounts is relevant only to reinforce the point that consumers flock to what they perceive as a "deal" and pay little attention to the details which tell whether it really is a "deal" or not. 

With this single program accounting for nearly half the economic growth posted today, we are setting up for the classic "double-dip" recession.  The massive infusions of cash will generate some activity as they float about and settle to ground, but in the end they only really accelerate redistribution of income by borrowing against future taxes.  Since the money isn't actually being "invested" in any genuine market activity, in the long run it only acts to devalue the dollar further.

The phony "growth" shown by this massive cash blast - greater by three times than the Greenspan infusion to prevent Y2K panic in 1999 which led to the market bubble and bust - will attract unwary investors back into equities, but by mid-2010 it will become evident we have more pain to come.

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