Revenge of the Law of Unintended Consequences
Tags: Tax and Spend Liberalism.
Click here to get Caucus of Corruption: The Truth About The New Democratic Majority by Matt Margolis and Mark Noonan.
The story:
The popular “cash-for-clunkers” program is boosting U.S. auto sales and manufacturing but is also slashing donations to charities that rely on gifts of cars to fund social programs, charity officials say.
Volunteers of America and other charities that receive tens of thousands of cars each year said such donations have quickly fallen up to 12 percent — and fear a 25 percent drop eventually, or over $100 million — as owners rush to trade gas guzzlers for new fuel-efficient models while federal rebates last.
“We started seeing it right away in July” when the program began, said Jim Hartman, vice president of vehicle donations at Volunteers of America, a nationwide charity. “It varies by market, but there’s been an 11 to 12 percent drop compared with last year.”
“The cars I’m seeing cashed in as clunkers, like older SUVs, are absolutely the typical donation to us,” he said.
Now, why didn’t Obama and his Democrats not see this coming? Because you can’t run the show from DC – its impossible. What we’ve got here is what happens when government steps in – because no one in government can possibly know all that is going on, any government action, even the most well-intentioned, is almost certain to have a baleful effect somewhere. In this case here, its crushing some charities and, of course, making used cars more scarce for poor Americans.
We can’t pick the winners and losers – the only thing we can do is help the losers to bear their burden. But it is beyond our power to figure out just who should get what from whom…we don’t know who should pay and who should benefit and we’re almost certain to punish and reward the wrong people.
Perhaps now some of you liberals will start thinking about things.
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15 Responses to “Revenge of the Law of Unintended Consequences”
Caucus of Corruption
another consequence is that the 1/4 million repair shops across the nation will lose a ton of used cars that need repair…while the only real winners here are the banks that finance the notes and the car manufacturers (most of them (80% of the sales) foreign)
i still havent figured out exactly what constitutional authority these crackpots have that allows them to take money out of citizens pockets and to give it to thier neighbors to buy new cars with…the program is NOT going to make any substantial impact of fuel use nor will it put any americans to work…the regulation of commerce has nothing to do with giving tax money to people…period…nor is it essential for anybodys welfare…
its only serves the interest of the banking and automotvie lobby….while it literally screws the rest of us…
Okay, let’s think about this… a $3 billion injection into the economy by way of the cash for clunkers program is expected to result in auto sales of around $12 billion, and an average improvement in fuel economy of something like 9 mpg. I don’t know the numbers, but assuming the average clunker got 15 mpg, that would mean the average new car got 24 mpg. And assuming the average car is driven 10,000 miles/yr, and (as the article states) 700,000 cars are involved, that means a reduction in gas consumption of about 17.5 million gallons of gas/yr. So if gas costs an average of $3/gal over the year the savings accrued would be about $52.5 million/yr for every year the fleet of clunkers would otherwise be on the road. Consequently, that means that in two years the savings in gas alone will more than make up the anticipated $100 million in losses to charities.
And by the way, $100 million works out to about 30 cents for every man, woman and child in the US. So if you’re really concerned about charities losing out as a result of this program, that’s all it would take to make up the difference. Is that too much to ask?
Sadly though, charities are taking a much bigger hit than $100 million in this recession than this one program represents. People just aren’t giving as much as they used to. If you don’t want the government taking over the role of charities, please think about that, too. And please find it in your heart to give a little more to your favorite charity. They need it to help the people that need it ever so much more.
Sadly, the feds have only paid 2% of the voucher claims….
http://www.foxnews.com/politics/2009/08/16/auto-dealers-paid-just-percent-clunkers-claims-congressman-says/?test=latestnews
…where is all the money? Oh, that’s right. The feds have no clue.
And they are looking for more money????
tiredoflibbs (August 17th, 2009 at 12:06 pm), you seem to be oblivious to the many levels of irony in your comment. But I guess the central question is… are you in favor of the cash for clunkers program or are you against it? If you are against it, then Sestak’s charge should be music to your ears. If you are for it, then it would be the opposite. Another level of irony is the fact that you taking Sestak’s word for anything. Another is the fact that if you believe him, you’re nonetheless asking where the money is when in fact the article states that he claims most of it hasn’t gone anywhere.
Whatever your intended stand is supposed to be, I think you need to get your story straight, and perhaps apply some logic to it.
I am wondering if we will be seeing cars that where purchased through Cash for Clunkers being reopsessed? How many of the people that bought a car through this program cannot or will not be able to hold on to them? Is this just another stupid Obama idea?
fartotheright,
That’s an interesting idea, but do we have any proof that creditworthiness was compromised in auto sales as it was in home sales?
reality, the most meaningful claims by rico;
” I don’t know ”
“but assuming the ….And assuming the …”
they show that the best he can do is based in typical stoogery…
rico, I must have missed something in your accounting. When you say “….in two years the savings in gas alone will more than make up the anticipated $100 million in losses to charities….” just how does the money “saved” get transferred to the charities?
OK—I own, say, a 1995 ‘clunker’ that I trade in on a new car. I save $X per year on gas, but I also pay $Y per year on car payments, so I am not getting a net savings. But even if I were, how would that savings get transferred to a charity? Are you assuming that I would be so happy to save my couple of hundred dollars a year on gas that I would just write a check to a charity for that amount?
Or, I give my ‘clunker’ to the charity, take my tax deduction, and then buy a new car, still getting the savings on gas mileage but paying more per year on my car payment.
In either of these two cases, I am still saving on gas. With Option 1, I save money on gas and the charity gets nothing. With Option 2, I save money on gas and the charity gets a car it can fix up and sell, to generate funds for its work. In both options, new cars are bought and gas is saved.
If you are saying that getting the ‘clunkers’ off the road for good is the source of the gas savings, you are still ignoring the fact that the charity is out its donations. And the poor who buy the refurbished cars sold by the charity are out the source of cheap transportation.
Option 1 benefits the auto dealer, costs the taxpayer for something he doesn’t even experience, and the charity suffers. Tax dollars are spent to incentivize the transaction, but according to the charities, the transactions would have occurred anyway—they just don’t get the cars.
Option 2 benefits the charities. No tax dollars are spent, though there is a small deduction for the person donating the car. The only one incurring cost is the person who had control over the decision, who donated the car, who is now paying more in car payments on his new car but who got a small deduction for his old one.
Option 2 also benefits those who can’t afford to buy new or newer cars.
friday, only 2 us made cars were on the top 10 list…so the benefits of giving taxes to the Japanese are what? please explain how that stimulates our economy….
and then…to boot…
vehicles that qualify for the 4500 spiff;
2009 Chevrolet Express 6.0L 8cyl 4A RWD Category 3 Truck
2010 Chevrolet Express 6.0L 8cyl 6A RWD Category 3 Truck
2009 Chevrolet Express Cargo 4.3L 6cyl 4A RWD Category 2 Truck
2009 Chevrolet Express Cargo 5.3L 8cyl 4A AWD Category 2 Truck
2009 Chevrolet Express Cargo 4.8L 8cyl 4A RWD Category 3 Truck
2009 Chevrolet Silverado 1500 4.8L 8cyl 4A 4WD Category 2 Truck
2009 Chevrolet Silverado 1500 4.8L 8cyl 4A RWD Category 2 Truck
2009 Chevrolet Silverado 1500 5.3L 8cyl 4A 4WD Category 2 Truck
2009 Chevrolet Silverado 1500 5.3L 8cyl 4A RWD Category 2 Truck
2009 Chevrolet Silverado 1500 5.3L 8cyl 6A 4WD Category 2 Truck
2009 Chevrolet Silverado 1500 5.3L 8cyl 6A RWD Category 2 TruckBack to top
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2009 Chevrolet Silverado 1500 Hybrid 6.0L 8cyl gas/electric hybrid 4A 4WD Category 2 Truck
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2009 Chevrolet Silverado 2500HD 6.0L 8cyl 6A 4WD Category 3 Truck
2009 Chevrolet Silverado 2500HD 6.0L 8cyl 6A RWD Category 3 Truck
2009 Chevrolet Silverado 3500HD 6.0L 8cyl 6A 4WD Category 3 Truck
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2009 Chevrolet Suburban 6.0L 8cyl 6A RWD Category 3 Truck
2009 Chevrolet Suburban 6.0L 8cyl 6A 4WD Category 3 Truck
2009 Dodge Ram Pickup 1500 5.7L 8cyl 5A 4WD Category 2 Truck
2009 Dodge Ram Pickup 1500 5.7L 8cyl 5A RWD Category 2 Truck
2009 Dodge Ram Pickup 1500 4.7L 8cyl 5A 4WD Category 2 Truck
2009 Dodge Ram Pickup 1500 4.7L 8cyl 5A RWD Category 2 Truck
2009 Dodge Ram Pickup 1500 3.7L 6cyl 4A RWD Category 2 Truck
2009 Dodge Ram Pickup 2500 5.7L 8cyl 5A 4WD Category 3 Truck
2009 Dodge Ram Pickup 2500 5.7L 8cyl 5A RWD Category 3 Truck
2009 Ford Econoline Cargo 4.6L 8cyl 4A RWD Category 3 Truck
2009 Ford Econoline Cargo 5.4L 8cyl 4A RWD Category 3 Truck
2009 Ford Econoline Wagon 4.6L 8cyl 4A RWD Category 3 Truck
2009 Ford Econoline Wagon 5.4L 8cyl 4A RWD Category 3 Truck
2009 Ford Explorer Sport Trac 4.0L 6cyl 5A RWD Category 2 Truck
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2009 Toyota Tacoma 2.7L 4cyl 5M 4WD Category 1 Truck
2009 Toyota Tacoma 2.7L 4cyl 4A RWD Category 1 Truck
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2009 Toyota Tacoma 4.0L 6cyl 5A RWD Category 1 Truck
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2009 Toyota Tundra 5.7L 8cyl 6A RWD Category 2 Truck
2009 Toyota Tundra 5.7L 8cyl 6A 4WD Category 2 Truck
2009 Toyota Tundra 4.7L 8cyl 5A 4WD Category 2 Truck
2009 Toyota Tundra 4.7L 8cyl 5A RWD Category 2 TruckBack to top
2009 Toyota Tundra 4.0L 6cyl 5A RWD Category 2 Truck
2010 Toyota Tundra 4.6L 8cyl 6A 4WD Category 2 Truck
2010 Toyota Tundra 4.6L 8cyl 6A RWD Category 2 Truck
2010 Toyota Tundra 5.7L 8cyl 6A RWD Category 2 Truck
2010 Toyota Tundra 5.7L 8cyl 6A 4WD Category 2 Truck
2010 Toyota Tundra 4.0L 6cyl 5A RWD Category 2 Truck
whats that? 24MPG?
BULL
wow, rico, you ask questions that have been obviously have been answered. I blast a failed program and you can’t tell which side I fall on?
The government has not accounted for the money. The government has no clue as to the allocations of the money. Yet, you question my reference to an article that states so little has been paid? You dismiss numbers so easily and make huge assumptions on your scenario when obamateur has not released the facts of his scheme….
…and I have a problem with logic?
Unbelievable.
Hey, tired, I am still trying to figure out how some projected savings on gas spread out across the nation will find its way back to charities that used to depend on used-car donations for much of their income.
Amazona: rico, I must have missed something in your accounting. When you say “….in two years the savings in gas alone will more than make up the anticipated $100 million in losses to charities….” just how does the money “saved” get transferred to the charities?
Would that be a “gotcha”? Anyway, I didn’t mean to imply that the money “saved” would somehow get transferred to the affected charities (that’s silly), I meant to speak to the overall economic impact, which is, after all, what the affected charities ultimately intend to affect through their various social projects.
Perhaps another relevant question is… exactly what charities are we talking about? I don’t know for sure, but I think that could be a very interesting question. The ones I’m affiliated with don’t go that route. And the ones I hear about most are public radio and community colleges. How about you?
Also by the way, in addition to the $100 million in gas savings, don’t forget the additional $12 billion in sales the cash for clunkers program presumably instigated.
tiredoflibbs: I blast a failed program and you can’t tell which side I fall on?
Well, I’m pretty sure I know which side you want to fall on, it’s your logic that I question. For example, you say “The government has not accounted for the money”, when the evidence suggests (and assuming you are content to believe Joe Sestak, which still makes no sense to me) that the money has not been allocated. That’s very different. And nothing in what you provided suggested that the accounting itself is an issue. How do you not see that?
js02 (August 17th, 2009 at 2:37 pm), your fundamental point is worthy of discussion. But it was kinda lost in the fact that, to my knowledge, EVERY SINGLE ONE of the vehicles in the list you provided are “manufactured” in the US. And of course “manufactured” really means “final assembly”. So then we have to talk about where the parts were made, etc. As you probably know, that gets very hard.
By way of full disclosure, I own a 2004 Chebby Silverado 1500 crew cab short bed with 5.3 liter 8-banger. I have no intention of trading it in anytime soon, as it fits my current needs and lifestyle at least as close to perfectly as anything else that’s on the market at the present time. It might not get the best gas mileage in the world (about 20 mpg highway if I’m not hauling toys), but it’s almost infinitely versatile. In fact, it’s so versatile that a while back I decided to sell my house trailer. Okay, maybe that’s not saying much: I grew to hate the thing. It slowed me down, it cost too much to haul any distance, and it wasn’t all that much more comfortable and frankly less convenient (and considerably more expensive — but I already said that) than alternating nights in a motel room and the bed of the truck. The bed of my truck is really quite comfortable — it’s covered, and padded, and upholstered all around — and “plugged in”. Most rest stops these days even have wireless internet access! But basically, as long as it’s not raining, we can do pretty much anything at a rest stop that we could at home. Except shower. That’s a problem: Mrs Rico isn’t very fond of sponge baths. That’s where the motels come in, lol!