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Porkulus Comes Home To Roost

By Greg L | 28 October 2009 | National Politics | 27 Comments

Well, what do you know?  Remember the “stimulus” program the Democrats foisted on us to rescue the government-owned automakers from bankruptcy that handed out free cash in order to push people into auto dealerships?  It ended up costing taxpayers a whopping $24,000 per vehicle sold, and trashed the financial position of thousands of auto dealers who experienced huge delays in getting reimbursed.   To make things worse, we still haven’t seen the full fallout of this program yet, which might rival the financial consequences of Obama’s plan to “save or create jobs” that has been costing taxpayers $532,000 for each job “saved” or “created” so far. 

Here’s the tip from Snapped Shot on what you and I had to pay for this boondoggle: 

We learn today that, after all’s said and done, each car traded in using the Cash for Clunkers program ended up costing the U.S. taxpayer–that is, it cost you–a grand total of $24,000.

For a paltry $4,500 “credit” that’s taxable in the end.

Here’s where it really gets interesting:  In order to spur sales, not only were folks lured into the showroom with free government money dangling before them, but with relaxed financing requirements.  Almost everybody qualified for loans in this feeding frenzy, and lots of people couldn’t have afforded these cars with only about a 5% discount courtesy of the taxpayer and needed an extra incentive.  So many who otherwise might have exercised some personal fiscal restraint got spurred into turning in their perfectly usable, and mostly paid-for car in order to get something brand new with 100% financing.  During a bad economy. 

I’m hearing the rumbling that the default rate on the auto loans made during the “Cash For Clunkers” program is enormous already.  The real objects of this “stimulus” may well be reposession companies that are going to be busy stealing back all those new cars, leaving folks in worse financial shape than before the program started, and with no transportation to get to whatever work they can manage to find.  What are those folks going to do?  They’ve little choice but to go hunting for some old beater — a “clunker” — that they can get for cheap paying cash, while that nearly spanking new Prius they had bought sits on a used car lot waiting for a non-existent buyer.

“Clunkers For Cash,” the follow-on to centralized economic planning from our federal government.  These federal elected officials are complete idiots for pulling this stupid stunt.

As Brian over at Snapped Shot retorts, do you really want the folks responsible for devising these idiotic programs taking over the entire health care system in this country?



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27 Comments

  1. REG said on 28 Oct 2009 at 10:00 pm:
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    Somewhat related topic:

    In Prince William County the Federal Stimulus provided 25 Million Dollars to the Board of Education. This resulted in few jobs saved or created,real #’s have never been provided. However, the bulk of that funding went into pay raises for all PWC educators of 3%. There is another 25 Million Dollars in Federal Stimulus already targeted to PWC for the next school year. Raises for all! Makes me wonder if the Federal Stimulus is nothing more than a political slush fund???

  2. ... said on 28 Oct 2009 at 10:16 pm:
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    There will be a program to help those people avoid getting their car taken.

    Car
    Repossession
    Avoidance
    Program.

    CRAP.

  3. Conservative 2 said on 29 Oct 2009 at 4:41 am:
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    Anyone with a half of a brain would know this was not going to work. But then what do we know?

    Did the Teachers really get a raise?They sure have to put out more each year for supplies,so how does that help?

    This Country is going to the pots and when will it stop? I have never recieved so much mail from legislators all over the country leading a cause and of course want money.

    Wow,thats what I want,is money.

    Great story Greg.The Stimulas money,like the Health Care will be the death of us.

  4. Austin said on 29 Oct 2009 at 7:42 am:
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    I have considered asking the Obama administration for a personal bail out. I am not greedy, I figure One Billion Dollars would be just about the right amount. With this I can create lots of jobs and eliminate 1, mine! I will be able to employ a personal assistant, a landscaper, chef, car attendant/chauffer, an accountant to handle political donation requests as well as several other positions.

    If this plan sounds viable, let me know. I do not want to disturb the President with frivolous requests, as I am sure his time is being occupied as Chairman of General Motors, solving health care, and traveling to Oslo to pick up his Nobel Prize.

    PS. I will provide employer paid health care, if this stimulus bail out comes through. Applicatins will be available at the local Acorn headquarters.

  5. Advocator said on 29 Oct 2009 at 9:04 am:
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    Reg: Pay raises to teachers are appropriate. They have not kept up with the competition due to diversion of funds to ESOL and other programs resulting from the Illegal Invasion.

  6. Anonymous said on 29 Oct 2009 at 9:56 am:
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    Hummmmm… I guess you guys live in a different Country than I do.

    CNN this morning: Economy finally back in gear - Government says GDP grew 3.5% in third quarter, ending a year-long string of declines and coming in better than forecasts.

    http://money.cnn.com/2009/10/29/news/economy/gdp/index.htm

  7. Karla H said on 29 Oct 2009 at 10:51 am:
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    Heh, heh… I love this cash for clunkers program. It was well worth it for the laughs I got.

    1. The clunker stimulus money that people got is taxable.
    2. I bet 99% of the people who bought these cars did so with car loans.
    3. I bet a certain percentage of these people will not be able to afford these loans in the near future, and will default on them, just like the buyers of those foreclosed houses did a few of years ago.

    We cannot run a economy by printing money and giving it away. We have only succeeded in digging ourselves a deeper hole by trying to do so.

    Politicians create no wealth. In fact they destroy wealth thru inflation. They have always relied on a leap in technology to counter their inflation. We have not had such a deflationary leap in technology lately. Until we do, we will continue to be in trouble.

    “Economy finally back in gear - Government says GDP grew” - Anonymous

    Hmmm… would that be the same government that said they needed $800 billion in one week or “bad things would happen”? They tipped their hand with that statement. Our “visionary” government cannot see more than 1 week out.

  8. Greg L said on 29 Oct 2009 at 12:04 pm:
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    From my inbox this afternoon:

    Clunker Math:

    Think of it this way, a clunker that travels 12,000 miles a year at 15 mpg uses 800 gallons of gas a year.

    A vehicle that travels 12,000 miles a year at 25 mpg uses 480 gallons a year.

    So, the average Cash for Clunkers transaction will reduce US gasoline consumption by 320 gallons per year.

    They claim 700,000 vehicles were traded in so that’s 224 million gallons saved per year.

    That equates to a bit over 5 million barrels of oil.

    5 million barrels is about 5 hours worth of US consumption.

    More importantly, 5 million barrels of oil at $70 per barrel costs about $350 million dollars so, the government paid $3 billion of our tax dollars to save $350 million.

    We spent $8.57 for every dollar saved.

    How good a deal was that???

    They’ll probably do a great job with health care though!

  9. ... said on 29 Oct 2009 at 12:16 pm:
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    “Government says GDP grew 3.5% in third quarter”

    That cuts about as much ice with me as an Enron quarterly earnings report.

  10. Pat.Herve said on 29 Oct 2009 at 2:15 pm:
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    just proves that you can make numbers say anything you want. It is all in how the numbers are interpreted.

  11. Advocator said on 29 Oct 2009 at 2:49 pm:
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    The Wall Street investors must believe the numbers. Market’s up almost 2%.

  12. Anonymous said on 29 Oct 2009 at 3:04 pm:
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    BREAKING NEWS - Wall Street’s best day in 3 months ends with the Dow surging 189 points, S&P gaining 2.2% and Nasdaq 1.8% higher on strong GDP data.

  13. Freedom said on 29 Oct 2009 at 4:13 pm:
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    …but Anonymous, just how does all that play out for you after MAJOR losses the last two days? :( Still feeling good about things? :)

  14. Emma said on 29 Oct 2009 at 4:23 pm:
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    Hummmmm… I guess Anonymous lives in a different Country than I do.

    The gains are very temporary, and they occurred mostly because of govenrment programs–like Cash for Clunkers–that encouraged consumer spending. Consumer spending is about 2/3 of GDP, so big whoop on the 3.5 %.

    Unemployment ROSE to 9.8 percent in September. Do you celebrate that?

  15. Anonymous said on 29 Oct 2009 at 4:56 pm:
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    I’m feeling pretty good these days… and you would to if you understood what was going on. The last two days don’t matter, tends matter. What does matter is an economy that has recovered to 2008 levels a year ago: Dow around 10,000, NASD around 2,000.. Unemployment is a lagging indicator. First, the market recovers to create capital, then investment creates jobs.

    This is Junior College Economics 101.

  16. Emma said on 29 Oct 2009 at 5:29 pm:
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    What does matter is that this “recovery” is temporary. It is based on a spike in spending due to government giveaway programs funded with borrowed money. As long as you’re happy to live in a house of cards, I suppose this will work for you.

    This is high school economics.

  17. Anonymous said on 29 Oct 2009 at 5:36 pm:
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    Believe as you wish… I’m buying!

  18. Kevin C. said on 29 Oct 2009 at 6:07 pm:
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    WASHINGTON – The White House…aggressively defended an earlier, faulty count that overstated by THOUSANDS the jobs created or saved so far.

    Sounds to me like ol’ Obamma is starting to CHOKE on that PIE IN THE SKY he was peddling last year.

  19. Pat.Herve said on 29 Oct 2009 at 6:27 pm:
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    so, do you think we would now be in a better position with ‘The economy is strong’ John McCain??

  20. Anonymous said on 29 Oct 2009 at 6:56 pm:
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    If the economy has turned the corner, why are the democrats wanting to extend unemployment benefits, HR 3548, hmmmm????

  21. ... said on 29 Oct 2009 at 8:33 pm:
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    Also why do they want to extend the $8000 first-time homebuyer credit?

  22. wineplz said on 29 Oct 2009 at 10:13 pm:
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    And to think, most of those clunkers weren’t just sent to the used car lots or junkyards for recycling. No…they were “poisoned” rendering them completely unusable and restricted the chances that they could be fully recycled, since it’s not just the tires, body and chassis that get recycled, but wiring, and most of the engine components. But not when the copper and other components have been damaged. So instead of having low-cost usable used cars for low-income folks (or others down on their luck) to purchase with cash or very little credit so that they can go to work and school, they ruin those vehicles, wave some cash in front of their faces, and convince them to sign onto financing a vehicle for the next 48-72 months, leaving the risk of default much higher.
    I know they will pull the same sort of crap with Health Care. Poison the existing private insurers, say they’re not good enough, wave some flimsy “incentive” in front of us, and convince us to sign onto some crazy “deal” that steals an additional 8-12% out of our paychecks. As usual, it will hurt those in the lower income brackets worst.

  23. Anonymous said on 30 Oct 2009 at 6:58 am:
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    Stimulus creates 650,000 jobs

    http://money.cnn.com/2009/10/30/news/economy/Stimulus_jobs_created/index.htm?postversion=2009103007

  24. Snapped Shot said on 30 Oct 2009 at 8:30 am:
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    Success in Government Programs: $24,000 Loss Per Vehicle!…

    We learn today that, after all’s said and done, each car traded in using the Cash for Clunkers program ended up costing the U.S. taxpayer—that is, it cost you—a grand total of $24,000.

    For a paltry $4,500 “credit” that’s taxable in the en…

  25. Emma said on 30 Oct 2009 at 6:05 pm:
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    Anonymous said on 30 Oct 2009 at 6:58 am:
    Stimulus creates 650,000 jobs

    How about a little intellectual honesty, Anonymous? That figure is based on a report generated by none other than the Obama Administration.

  26. Emma said on 30 Oct 2009 at 6:20 pm:
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    Further evidence of Anonymous’s delusion:

    (blockquote>You want to get scared for Halloween? How’s this: Yesterday’s big stock market gains have been more than wiped out today, as traders engaged in a massive sell-off.

    The Dow closed down 2.5 percent, the broader S&P 500 closed down 2.8 percent and the tech-heavy Nasdaq closed down 2.6 percent. All 30 Dow components were down on the day. Today marked the close of the worst week for the Nasdaq since March. Overall, the markets were down for a second straight week.

    http://voices.washingtonpost.com/economy-watch/2009/10/stocks_ending_october_on_massi.html?hpid=topnews

    Yeah, we’re doing just great, Anonymous.

  27. Freedom said on 31 Oct 2009 at 5:49 am:
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    Here’s the deal, “…said,” they want to extend the $8K home-buyer’s credit so they can get even MORE people into debt they can’t afford and then, through a “mortgage assistance” program, control the lives of those who default on their loans as well.

    It’s a good method of gaining power over people, but it’s not good for the economic health of our country. :(

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