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Your position is more thoughtful and balanced. I disagree because I believe that you haven't thought this through fully and done any analysis who's driving it, why, who benefits, etc.
You blame the democrats but in fact it was written in the very republican offices of the US automotive industry. Most top business people are NOT democrats...they're republicans. Ditto - IMO - the majority of small business owners call dealerships. So if this legislation is the creation of true redblooded republicans who gave it to the democratic majority to formalize it certainly seems like a bipartisan project.
Then there's the unseen hand that you over look.
Supply and demand. Supply and demand. Supply and demand......
If you don't have a clunker you will be wise to stay out of the car market for awhile.
My tax dollars are going to support the Mars project. I've designated them as such.
Toyota's tax dollars are going to fund this program.
BTW Toyota's tax payments are many times larger than yours or mine, individually or combined. They get more say in how the money is used....ditto Honda, Nissan, BMW, Hyundai...the D3 can tag along too because their expected tax payments in the near future will be huge again.
This program is a lot deeper than you're giving it credit for being...far deeper.
Next year and the year after when the recovery arrives then sales will normally return to 11-12 million units. That from all reports is the lowest comfortable level for the restructured auto makers. The lowest comfortable level where they all can breakeven or make a profit.
GM and Chrysler are best structured now to make big profits when this does occur.
2.creaky old Volvo with a gazillion miles on it gets recycled
3.another 2010 car on the road that is safer and more fuel efficient
4.car salesman keeps his job
5.automaker sells another car.
So what's the problem?
It's not like they crushed a Bugatti or something. It's just an old beater.
Oh, and some young kid is gonna love those wheels he buys from the wrecker for 1/4 the price of new ones.
On top of all that, some buyers are reporting that it is EASIER to get loans because the voucher acts like a large down payment, reassuring banks that they have a better chance of getting their money back in case of default (the voucher in a sense balances out the instant new car depreciation).
So in effect, borrowers won't be "bottom up" in their loans on C4C cars.
They probably won't need gap insurance either.
Our biggest risk is running out of inventory during the heaviest selling month of the year...August. And we're the biggest store - any brand - within 100 miles.
And yes, the Republicans may have done the same thing if they were running the show-my main point wasn't to be partisan. But if you oppose a public policy you have to hold the governing party responsible And there's no denying the governing party is the Democratic Party.
As far as top business people being mostly Republicans-that was true in the past, but I believe that has been changing over the last couple of elections. The Democrats received more Wall Street money in the last couple of elections, and, if you look at the voting breakdowns by income category, I believe the Democrats have been getting much more of that vote (and contributions) than they used to.
And don't forget that UAW, an outpost of the Democratic Party by all accounts, is now a part owner of both GM and Chrysler, and almost certainly influenced the crafting of this legislation
Cash for Clunkers is a joke, on so many levels. Just about everyone can find something to dislike about this program. I strongly encourage anyone who agrees with me, to contact their elected rep (especially their Senators) and encourage them to vote against throwing any more money down this hole.
Actually viewed from the opposite side of the desk so to speak you couldn't be more wrong. This bill was written by the auto industry to benefit the auto industry. If your premise is correct that prices are rising and incentives are falling....hellooo...that's exactly what the bill was intended to do. If you're correct then the auto industry that wrote this bill must be astonished that their creation has worked so well so quickly.
With the clout of Detroit and Torrance and the clout of 20,000+ small businesses called dealerships in every district in the US you can bet that the critters from Congress will hear wonderful things when they come back to their districts for the month of August.
As much as you dislike it....that's how much the ones that wrote it love it.
The economy may very well be hurting but it's not failing. In fact the leading indicators show a bottoming. Recovery will take years and years, the fall was that bad. I'll do alright, I always have.
The plan works as created by the auto industry for its own benefit....not your benefit. Deal with it.
Also, almost half of the Republicans in the House and over two-thirds of the Republicans in the Senate voted for the bailout bill (H.R. 1424) last year.
If you don't like all these bailouts, at least spread the blame to both sides.
This certainly goes true for the small independent businessmen who run 20,000+ dealerships around the country.
These red-blooded Republicans actually wrote the bill. Then they handed it to the Democrats in power and said "Make this happen."
Then there's the other powers that want this to happen and they're almost never Democratic....the military and intelligence communities.
Sorry your political viewpoint is being bent by the prism of irrational dislike. You're not seeing reality. You may not like the program on ideological grounds but you up against an array of uber powerful opponents that not only want it to happen but will ensure that it does. You're screaming for the wind to stop.
They also ruled that since NH and Wisconsin don't require drivers to have car insurance, residents of those states don't have to show continuous proof of insurance in order to qualify for the program.
More at cars.gov under the Official Information > Download Amendment (if you can get onto the site - my wife was able to load the page earlier this evening after hitting it a few dozen times. It's loading ok this late in the day).
I've stated it many many times here in the prior 2300 posts. Again for the 200th time.....
This legislation was written by the auto industry for its own benefit.
It has worked far better than could have been imagined. It's a temporary boost to carry the industry over this economic abyss.
Here I'll throw you a pacifier. The money doesn't come from your pockets. It's being borrowed from the future tax payments of many large and small companies in the auto industry that will make profits off the program and thus will then pay more taxes. It will also help many marginal companies survive to pay even more taxes in the future. It will increase business and tax payments from a wide array of companies from aftermarket window tinters to dealers to truckers to auto makers to glass makers to steel companies to iron ore companies. It will help to keep millions of people employed and even increase the level of employment so that the state and IRS collect even more taxes from the workers.
No seatbelts required and no insurance needed. NH sounds like a lovely place to get rammed into by a judgment proof driver. :P
And to my knowledge Charles Schumer, Democratic Senator from New York was the one who wrote this legislation and did the most flacking for it:
http://schumer.senate.gov/new_website/record.cfm?id=311570
And the US auto industry is is the most capitalistic of all companies? This recent legislation puts the puts the lie to that assertion-but there are other examples from history as well-import quotas from the 1980's, the 1980's Chrysler Bailout, recent bailouts of GM and Chrysler, etc. etc.
A 25 year history of protectionism and government subsidies, hardly qualifies as capitalism.
And please provide some support for your assertion that the military and intelligence communities support "Cash for Clunkers" legislation and have influenced its passage. That is very left field. I see no evidence for that at all. Maybe you are thinking of the fact that the initial legislation was tacked onto a military spending bill?
The plan works as created by the auto industry for its own benefit....not your benefit. Deal with it.
I agree. And again that is my point: a self-serving bill was pushed through congress with the cover that our society as whole benefits-it does not, even in the short term, and I think over the long run it will be hurtful, even to your industry.
Thank you.
ECON 101 demand and supply.
You said it. "Temporary". It has convinced people who would have waited to buy cars in a year or two, to buy one now. So when the program ends, there will be no buyers for another two years. They are hurting future sales, for present sales. Do you really think that's a good idea?
Am I also supposed to believe this is not increasing the deficit, which we will all pay for in the years to come? It's like the government's own credit card. They keep charging and charging, but sooner or later they/we will reach the credit limit, and the payments will be astronomical.
I don't think anyone who loves cars, and sees that video can feel anything less than outrage.
I absolutely guarantee that the car payments for a new car are going to be far higher than the gas bill for these so called "clunkers", and the energy to produce a new car is far greater than the energy used to move it. So don't expect it to do anything for the price of energy. If you really want lower energy prices, tell you congressman that we need more nice, clean nuclear power plants, and more oil drilled in alaska, and stop wasting money on the idiocy known as ethanol.
There's an angle for you - don't give any clunker money to a resident of a state that doesn't have a seat belt law, a no-texting law, and a no cell phone law. We'd get some junkers off the road and get a double whack at lowering highway fatality rates. :P
It is refreshing to hear you admit that Republicans are more attuned to the needs of the country than are the Democrats.
Giving credit for a successful program where the credit should be. Of course the implementation by those governing US was Horrible.
Not to worry Obama is looking at raising all our taxes. That includes the 95% that were going to get a tax cut. Oh well....
To get the economy back on track, will President Barack Obama have to break his pledge not to raise taxes on 95 percent of Americans? In a “This Week” exclusive, Treasury Secretary Tim Geithner told me, "We’re going to have to do what’s necessary.”
Geithner was clear that he believes a key component of economic recovery is deficit reduction. When I gave him several opportunities to rule out a middle class tax hike, he wouldn’t do it.
http://blogs.abcnews.com/george/2009/08/geithner-wont-rule-out-new-taxes-for-mid- dle-class.html
The indicators may not be meaningful. The local newspaper has an article today about how mortgage defaults have decreased in Ohio. BUT that's the result of many programs and pressures to help stop the defaults--it's not a result of the economy's having been saved by a pork bill and a little stimulus from either party's president.
>indicators show a bottoming.
I agree it has bottomed. And I believe economics will improve. However jobs won't.
That's why the $4C was so silly. If the $4C were truly built by UAW it should have included the big 2 companies and their cars and cars by other manufacturers which were truly built in the US to stimulate US jobs. But it would not include cars built elsewhere.
That didn't happen.
2014 Malibu 2LT, 2015 Cruze 2LT,
The so-called "poor" can't afford to drive a ten year old Volvo with 150,000 miles on it---that makes no sense. Giving them a car like would be a disservice, to say nothing of a short-lived experience. Most low income folks can't afford to keep up a car like that.
Besides, the cars being crushed are a drop in the bucket.
You can go on craiglist and buy all the Volvo S60s you want for under $4500 (I just checked).
One has to presume that anyone who wants a $4400 Volvo S60 with 150,000 on it has already bought it--otherwise there wouldn't be a page long list of them for sale.
The Cap and Tax, the social Healthcare plan, paying off the huge spending spree so far, all are taxes. He's got to increase on the middle class. And it's coming out finally
>Geithner was clear that he believes a key component of economic recovery is deficit reduction.
Where was he when the porkulus bill and all the other spending for TARP was occurring?
The benefit of $4C is that it's stimulating a lot of small businesses and increasing paychecks for lots of salespeople. They will be spending that money.
2014 Malibu 2LT, 2015 Cruze 2LT,
Still, watching that video made me sick to my stomach.
The C4C program was originally started in Europe, and I think believe Germany was the first to try it..Obama's 30+ czars are well educated in Socialism and the Russian style of governing..Hand-picked to screw up our lives..
The C4C program is another ruse to switch our mind off of the real issues, and will really help the Japanese and Korean car mfgrs..and keep the factories in Asia busy
cranking out little square boxes which are 100% non-american content..I believe the entire Scion series is totally foreign and so far the Prius is 100% Asian. I don't worry about the Germans flooding our market with little boxes, for they don't really like the mini-type cars, after all they semi-rejected the "Smart fortwo". , however Penske saw another way to screw the public..
Hey, folks---Obama is spending only chump change of 4 billion$$$$$$$$ to stimulate the automotive and really doesn't care or know a damn thing about the industry..After all, Obama allotted 5 billion$$$$ for "Neighborhood Organizing Groups" as his expertise and background resume highlights..
The C4C program really shows us how our tax$$$$ are managed by an overstaffed and underbrained govt.. for they really are tangled up in their "underwear". Wait until they administer the "Obamacare Health Plan".
Since I was married in Germany in late during the late 50s, and my other half spent roughly 6wks/yr with her family thru 2000, our shift to their style of life is scary..Taxes are 50-60% of income, two classes of people, upper and lower, no middle..If you break your hip over the age of 60, they screw the bones back together and if if breaks again they use a larger screw, and if it doesn't work, you get a wheelchair and a packet of pills..
The C4C will be a success, with the left-hand spin machine going full blast. Debbie Stabenow ,Dem, Mich was behind the additional money grab for Clunkers..The Big3 will die a slow death and our manufacturing base will disappear.. Recovery w/o Detroit is not in the books..We will maintain high unemployment forever, and we will become a mirror image of Europe..
Our current spending is "Window Dressing", big deficits "no problem"', for our currency will be revalued within 1 yr, due to the actions of the big Banks of the world and our own Federal Reserve System which is owned by the big banks, not our Federal Govt..So far during this recession 69 banks have gone under, no problem for they are absorbed by the large banks and our FDIC writes out a few more checks to cover the losses..
All of our Treasury high rollers are ex-bigshots of Goldman Saks, and while we go about our daily lives they are busy little folks, remember when Europe went to the Euro dollar, England stayed on their currency..The American dollar will disappear soon for our real debt is somewhere around 360 trillion$$$$$, gold will rule, and the value of the Greenback will take a 50% hit..
So enjoy the Federal Handouts, you are paying for them. Watch our Treasury Dept, Paulson,Bernache, and "Tax Cheat" Geithner..Keep a handle on George Soros for he chases and shorts currencies for his living and shares his "profits with the Democrats", he is one of Obamas bosses..
Being old in this day and age is somewhat of a blessing for the last 75 yrs have been great under the "Capitialist System", for the most part the Govt got out of the way and let the system work. Next time you vote look at someones background, that is, if you can see beyond the "Smoke"..
But the mainstream media promoted him as the one understanding the economy and the one with all the answers. They didn't tell us the answer was spend, spend, spend.
2014 Malibu 2LT, 2015 Cruze 2LT,
C4C has nothing to do with the President. It's not his baby.
RE: Old Volvo---why would you be upset to see a worn out, old, mass produced, nothing-special car get scrapped? This happens millions of time a year in America.
Are you replying to me?
Didn't bother me a bit. They need to scrap more of them. Are any of them assembled in USA?
2014 Malibu 2LT, 2015 Cruze 2LT,
Saab has announced new programs yet. Land Rover is still the same AFIK but they don't have any cars that would qualify under CARS anyway.
I haven't talked tot he guys at our other dealers but I bet they stayed the same too.
The old body T6 model S80s are all hand grenades waiting to happen. The engine isn't so bad but those twin turbos do cook everything and the trans, a GM made unit that was put in because it was the only one slim enough to fit behind that engine in a transverse mount, is very, very weak.
Most T6 S80s needed a trans before 50,000 miles and another one at around 80,000-90,000 miles. I already asked how many miles that S80 had in the comments section of that video and they guy who torched it said 90,000 miles. That S80 most likely needed a trans and at 90,000 miles that T6 engine would be pretty well worn out too. The total of those repairs more then outweigh the $4,000 or so wholesale value that the car has.
My guess is that there'll be more old trucks and SUVs scrapped than anything else, and that they are mostly being replaced by conventionally-powered compact and midsize sedans.
I'll buy, but way below invoice
This is why short-term programs aimed at modifying long-term decisions are a bad idea. Once this program ends, the feds should either (a) declare that there will be no such programs in the foreseeable future, or (b) institute a lower-impact permanent scrappage plan that is much better thought out and much easier to implement, based on the lessons learned from this one, to allow people to plan for the longer term.
Year-over-year sales up, Ford reports
Part of the reason was consumers' enthusiastic response to the federal government's cash-for-clunkers program, which provides vouchers of $3,500-$4,500 on the trade-in of gas guzzlers for more efficient vehicles.
“Our July business got off to a good start, and then with clunkers, it went into higher gear,” said Ken Czubay, vice president of marketing and sales for Ford. Ford views the increase as as good news not just for the Dearborn automaker, but also for the industry and the overall economy
http://www.freep.com/article/20090802/BUSINESS01/90802032/Year-over-year-sales-u- p--Ford-reports
http://www.dailyfinance.com/2009/06/17/in-midst-of-auto-crisis-al-gore-backs-a-n- ew-car-company-in-loui/
It sounds like Hyundai lowered their incentives on some models (Elantra I think).