Is the cash for clunkers cashed out? Most consumers had been holding off buying a new car this year. They have been placing that money in savings instead, because of the uncertainty of the economy.
The Federal Government has attempted to stimulate the almost stagnate new car market, by offering "Cash For Clunkers." The program offers a $3,500 - $4,500 voucher when trading in a vehicle getting less then 18 miles per gallon and manufactured with the last 25 years. The voucher can be used instantly to reduce the price of a qualifying new car.
The designers of the program thought it would take until November 1st to use up the $1 Billion fund allotted for the incentive. Well, in just over one week the fund has been depleted. So the House of Representatives voted Friday to add another $1 Billion from the TARP funds. The Senate still needs to approve the funding. Without Senate approval any car dealer providing a discount, in anticipation of the extended funds, will do so at their own risk.
At this point one needs to question the wisdom and purpose of the "Cash For Clunkers" program.
Is it to provide more jobs for the auto industry? Then congress needs to provide funding for more then one additional week. A minimum of $12 Billion in additional funding would be needed.
What happens after the program is complete? It is a good possibility that the auto industry will grind to a halt. People will not purchase new cars, because they will be waiting for the program to return.
Is the program to help reduce our dependence on foreign oil? This does very little to do such a thing. There simply are not enough cars involved.
No, I am sorry to say that it is simply a token program, to make us think our representatives are working for us. And these are the same people, who want to control healthcare. Lots of luck with that!