Cash for Clunkers to stop at 8PM Monday

[benbradley]

http://www.freep.com/article/20090820/BUSINESS01/90820066/1319/U.S.-to-shut-down-cash-for-clunkers-at-8-p.m.-Monday
First two sentences:
WASHINGTON – The U.S. government will shut down its cash-for-clunkers program at 8 p.m. Monday, in a bid to avoid car dealers and shoppers from claiming more than the $3 billion set aside for the program.

The decision means that the program originally expected to generate 250,000 vehicle sales over three months will have likely triggered more than 700,000 in less than one month.
Holy smoke!

[Don]

All those people called back to work haven't even reported yet. This has to be one of the fastest-breaking bubbles in history.

[Seaclusion]

And much to the chagrin of GM execs.

Richard

[astonwest]

You mean they can't just print another $3B and make it last a few more weeks?
:rolleyes:

[benbradley]

You mean they can't just print another $3B and make it last a few more weeks?
:rolleyes:
The printing of money for such projects doesn't depend on the availability of ink and paper, as one might at first think (talk about employment, I'm sure the currency printing and Treasury note printing employees are working a lot of overtime lately), but rather on the availability of political will. Congress might be running out of political will for this project.

But I'm sure there's still plenty of political will to tax-and-spend create-and-spend money elsewhere.


ETA: I think it was on NPR's "All Things Considered" or maybe PRI's "Marketplace" wher I heard about the possibility of another such program for new and more efficient home appliances (are any of these still made in the USA anymore?). The most amazing part is you wouldn't have to turn in an old appliance, so presumably you could keep on using it. I'm guessing the electric utilities arranged for that last part...

[SPMiller]

http://www.energystar.gov/index.cfm?c=tax_credits.tx_index

[Perks]

I guess I still don't understand the irritation at the program. I mean I understand if you're against all government programs on principle, which I could make sense of.

They wanted to move 250,000 cars in three months. They moved 700,000 cars in one. Why is this an epic fail? I'm not being snide, I really don't understand.

[whistlelock]

I don't get it either, Perks. I asked that same question in the last clunkers thread, and no answer yet.

[Bartholomew]

I guess I still don't understand the irritation at the program. I mean I understand if you're against all government programs on principle, which I could make sense of.

They wanted to move 250,000 cars in three months. They moved 700,000 cars in one. Why is this an epic fail? I'm not being snide, I really don't understand.

I don't get it either, Perks. I asked that same question in the last clunkers thread, and no answer yet.

Cool. Let's form the "I'm puzzled" club together.

I think its because this was a Keynesian economic idea, and a lot of economic conservatives strike me as classic economists. Meaning they don't think the government should have control over the distribution of money, if I recall correctly.

[Don]

This thread (http://absolutewrite.com/forums/showthread.php?t=151861) references this article (http://www.reason.com/news/show/135432.html), which explains in detail why C4C won't do much except destroy some cars that low-income people would have been happy to be driving.

What's somebody intimately involved in observing the auto industry think?
"In effect, we are paying customers to do something most would do anyway," noted Jeremy Anwyl, CEO of Edmunds.com.

Read the article to understand that mostly we're shifting the spending of dollars, and rewarding people for spending those dollars earlier than they might have.

Also, this is a good example of government building a bubble by putting false incentives into the market. Those people that were notified this week they were going back to work next week, and who will now get pink slips since the program is already ending, are a good example.

[Don]

I guess as of yesterday the automakers hadn't gotten the word that their bubble is about to burst (http://www.usatoday.com/money/autos/2009-08-19-automakers-production-gm-ford_N.htm?loc=interstitialskip).
Gleeful automakers are reacting to the cash-for-clunkers-driven spike in car demand with increased production plans for the third and fourth quarters.
That comes even as one leading industry researcher says the rebate program's appeal is waning and there are few signs a broad recovery has begun.

If automakers are premature in their plans they will end up in a cycle seen many times before: ramping up production and leaving dealers with lots of inventory that then requires profit-killing rebates to unload.
Isn't there an old song about "forever blowing bubbles?" Perhaps that should be our new national anthem, or at least Congress' theme song.

[Perks]

The dealers and salesmen I dealt with seem grateful for a bit of cash coming through after several months to a year or more of very little money coming in at all. They have bills, mortgages, tuitions, and expenses. Those people, by what they said to me in person, were going to be very careful with the small respite they've been given.

Certainly not as sexy as "Everything's fucked up forever and we're all going to be in breadlines next week (or maybe the following week or definitely by this Fall or you never know, so stay tuned...) so make sure you pay your cable bill above any other obligations. You simply cannot afford to peel your eyes away from your trusted 24 hour news source. brought to you by Coca Cola and the NEW! Honda Insight"

Check please.

[Don]

That a little welfare reached (or will reach, if the gov ever pays those C4C bills) the little people in the form of a bit of cash changes the underlying situation how?

[Perks]

Which warty underlying situation are we on now?

[Robert Toy]

That a little welfare reached (or will reach, if the gov ever pays those C4C bills) the little people in the form of a bit of cash changes the underlying situation how?
Don, you have to look at the positive point, we have 700,000 more people making monthly car payments.

[Perks]

So USA Today (a failing ragsheet by some reports) says that automakers are simply so stupid that they somehow forgot that Cash-for-Clunkers is(was) a limited rattling to shake loose a little money in a tight time and that their short-term production plans do not take into account what everyone on a writers message board seems to have so firmly in hand.

What am I supposed to do with that? I mean I've got my Wile E. Coyote umbrella up. Will that do it?

[Robert Toy]

follow your heart

[Perks]

follow your heartDon't have one. CNN and Fox News said that someone in the shadow government (could be the conservative wingnuts or the liberal whackos, depends on who you ask) stole it and sold it to someone either more deserving or rich and evil. It's hard to keep track.

[Perks]

Read the article to understand that mostly we're shifting the spending of dollars, and rewarding people for spending those dollars earlier than they might have.


Don, you have to look at the positive point, we have 700,000 more people making monthly car payments.

What I find interesting (and you can interpret that as euphemistically as you'd like) is that what's being reported in the news is somewhat at odds with the dealers themselves (four of whom I spoke to personally) reporting a surprise at the number of these cash-for-clunkers buyers who are paying cash for their new vehicles, not financing them.

Our situation was slated as typical. We had an SUV that was going bad and really did get suboptimal mileage. We were going to need to replace it within the next year, maybe two. The Blazer was worth about $2,000 and falling. The cash-for-clunkers incentive, combined with the dealers and manufacturer's eagerness, did sway our decision from perhaps a used car in 18 months or so, to a new car now. It didn't change how we paid for it.

Some people will definitely spend unwisely and I'm sure the program has its bureaucratic downfalls. That's definitely what we should lead with. Every time.

[tiny]

I guess I still don't understand the irritation at the program. I mean I understand if you're against all government programs on principle, which I could make sense of.

They wanted to move 250,000 cars in three months. They moved 700,000 cars in one. Why is this an epic fail? I'm not being snide, I really don't understand.

I have a problem with their definition of clunkers and the fact this program is being represented as a "green" program to get pollution causing cars off the road. There's my criticism of the program.

[Perks]

I have a problem with their definition of clunkers and the fact this program is being represented as a "green" program to get pollution causing cars off the road. There's my criticism of the program.And on that, we completely agree. It's silly and reminds me of the reasons I record all my TV shows and skip the commercials. Disingenuous advertising bullshit wastes my time.

[Robert Toy]

And on that, we completely agree. It's silly and reminds me of the reasons I record all my TV shows and skip the commercials. Disingenuous advertising bullshit wastes my time.
see you do have a heart! ;)

[Perks]

see you do have a heart! ;)No, that's just a little hardened kernel in my spleen.

They're coming for that on Tuesday.

[tiny]

Hell, we have a 64 Fairlane wagon, we have a 65 F250 Ford, and we have an 05 Jeep Wrangler (and today we're trading a motorcycle for a 61 thunderbird). Take a wild guess which one of these vehicles qualifies for cash for clunkers.

I just don't get it.

[Perks]

Hell, we have a 64 Fairlane wagon, we have a 65 F250 Ford, and we have an 05 Jeep Wrangler (and today we're trading a motorcycle for a 61 thunderbird). Take a wild guess which one of these vehicles qualifies for cash for clunkers.

I just don't get it.Ooooh - nice. Do you know what would happen if they called those cool old monsters 'clunkers'? They'd never be able to set foot in a church again. Immediately struck by lightning.

And if they can't feign religious conviction, they'll never get re-elected.

[benbradley]

I just heard on the radio a local dealer (Jim Ellis) is stopping the program two days early, which I presume means tomorrow is the last day they participate. There's also several stories of the feds rejecting or delaying applications, the cars.gov site not responding, NO support (perhaps they should have outsourced it to India), and the checks to dealers taking too long (ISTR they're supposed to get checks within 10 days) - some dealers haven't got the first check. "The real clunker is this cash-for-clunkers program."
Hell, we have a 64 Fairlane wagon, we have a 65 F250 Ford, and we have an 05 Jeep Wrangler (and today we're trading a motorcycle for a 61 thunderbird). Take a wild guess which one of these vehicles qualifies for cash for clunkers.

I just don't get it.
The one that qualifies to be traded in, disabled and destroyed is the one with the catalytic converter.

[Perks]

Truly. One of the bureaucratic bungles is that applications were getting rejected - all of them. When the dealership finally was able to get some clarity on the issue, it turned out it was all because the C4C forms had not been signed by the customer.

There was only one small problem - nowhere on the form was there a space or indication for the buyer's signature. The dealers have resorted to drawing a line on the bottom and marking an 'x' next to it.

There are definitely red-tape snarls, but I believe they'll be resolved. With as many cars as have cleared their lots and filled the scrapyards, the dealerships will go bankrupt if the paperwork doesn't get ironed out.

I still don't think the underestimation of the consumer reaction (making any small problems that much larger) makes the whole thing a failed joke.

[tiny]

Ooooh - nice. Do you know what would happen if they called those cool old monsters 'clunkers'? They'd never be able to set foot in a church again. Immediately struck by lightning.

And if they can't feign religious conviction, they'll never get re-elected.

Yet, our cars from the 60s all have huge V8s and suck gas through a pillar sized straw. The jeep, not so much.

But yes, we have a sort of addiction to cars so the destruction of running vehicles bugs the hell out of me. I love cars. I can't get past the wrap of those glass packs running the length of that whale boat truck. Gets my heart racing.

(of course, I could argue with myself that they're mainly destroying cars built to be completely unserviceable by the general public.... dang)

[Perks]

(of course, I could argue with myself that they're mainly destroying cars built to be completely unserviceable by the general public.... dang)

And that are soulless. And that are shaped like turds. You know you won't miss them. Neither will I.

-Perks
(minor gear-head)

[Don]

Reason.TV has a great 2-minute video ad (http://www.youtube.com/watch?v=_LcYZxGdY8U) for Uncle Sugar's Auto Mall. The bit with the doll is particularly priceless. :D

[tiny]

And that are soulless. And that are shaped like turds. You know you won't miss them. Neither will I.

-Perks
(minor gear-head)

No, I sure won't. I was born too late.

[astonwest]

There are definitely red-tape snarls, but I believe they'll be resolved. With as many cars as have cleared their lots and filled the scrapyards, the dealerships will go bankrupt if the paperwork doesn't get ironed out.

I still don't think the underestimation of the consumer reaction (making any small problems that much larger) makes the whole thing a failed joke.
I think the problem is that the government doesn't have any idea how much they've spent to this point. Those "red-tape snarls" are indicative of our government's ability to run programs which should be terribly simple. I would hope that people see a comparison between this simple program, and the complex one that would be required for any sort of government-run health insurance program, and know what they'd be in for.

I have no problem with the program itself, other than the really wacked-out way in which they define a clunker, the fact that they're pushing people into more debt they don't need, and that it's helping an auto industry (since obviously, many dealers aren't getting paid what they're owed) which was already granted billions of dollars in government aid. The idea of actually giving money to the citizenry so they could spend it instead of to big business so they could hand it out in bonuses to their CEOs, has always been a big plus in my book.

[astonwest]

(of course, I could argue with myself that they're mainly destroying cars built to be completely unserviceable by the general public.... dang)
If someone was a smart entrepreneur, they'd be starting up an engine manufacturer and purchasing the shells... :)

[William Haskins]

But many of those cashing in on the clunkers program are surprised when they get to the treasurer's office windows. That's because the government's rebate of up to $4500 dollars for every clunker is taxable.

"They didn't realize that would be taxable. A lot of people don't realize that. So they're not happy and kind of surprised when they find that out," Nelson said.

http://www.keloland.com/NewsDetail6162.cfm?Id=0,89084

[Don]

The government giveth, and the government taketh away.

:ROFL:

[Bartholomew]

http://www.keloland.com/NewsDetail6162.cfm?Id=0,89084

At a very special 100% rate!

[astonwest]

So, is that just in South Dakota, or everywhere? Not that I really care for myself, since I wasn't about to add to my debt load for a new car...but just out of curiosity.

[whistlelock]

I think people were misunderstanding what the program did- the Government gave them X amount for their trade-in, they did NOT reduce the sticker price of the car by X amount.

Of course, I am sure the dealerships were quick to point this out before any buying decisions were made. ;)

[Komnena]

I considered this deal with my sixteen-year-old vehicle but decided against it. I don't need car payments and much higher insurance on a new car.