I think this program has been highly successful and should be continued, and it looks like it will be;

WASHINGTON (CNN) — The Senate will okay new funding for the “cash for clunkers” program before leaving this week for the August recess, Senate leaders from each party predicted Tuesday, clearing the way for the surprisingly popular program to continue uninterrupted.

“We’ll pass cash for clunkers….before we leave here,” said Senate Majority Leader Harry Reid of Nevada.

“In the end, we know where the numbers are,” acknowledged the third-ranking Senate Republican, Sen. John Thune of South Dakota, a critic of the program who said now he expects all Democrats and several Republicans to vote for additional funding.

It doesn’t surprise me that Senator DeMint was against it, but I was a little surprised that Thune opposed it, especially with the auto industry so big in SD. But he is now one of the Big Wheels in the party of NO – He has to tow the party line. I don’t think this incentive is any different then when feds give incentives for installing energy efficient windows or water conserving toilets. Great idea for once.

27 Thoughts on “Cash for Clunkers; Finally Congress has a great idea

  1. Randall on August 5, 2009 at 8:39 am said:

    Possibly THE most effective use of stimulus funds since the WPA – and Thune opposes it…

    More and more it seems John Thune no longer works for South Dakota – he works for the National Republican Party and John Thune. Period.

  2. Ghost of Dude on August 5, 2009 at 8:42 am said:

    Thune would have loved it had Bush come up with it.
    I’ve said it before; this should have been the original auto bailout. It would have allowed the big three to offload their excess inventory and make money at the same time.
    Imagine how many clunkers even half of the bailout money could have replaced.

  3. Costner on August 5, 2009 at 9:20 am said:

    I wrong a big long post and when I hit submit it disappeared….so screw it.

    My point was that this program is not only putting the automakers back to work, but it is reducing our need for foreign oil at the same time since the MPG improvement thus far has averaged 9.1MPG which is a 61% improvement.

    I did find it humorous than 6 of the top 10 vehicles being traded in are various years of the Ford Explorer. I guess people must really hate those damn things.

  4. I think your car had to get 18 MPG or less to qualify.

  5. Ghost of Dude on August 5, 2009 at 10:44 am said:

    Actually, the new car had to get something like 9 or 10 more MPG – 2 or 4 for SUVs.

  6. I meant your trade-in not new car

  7. Actually, this program sucks balls and here’s why.

    It’s an artficial incentive passing money we DON’T HAVE from one taxpayer to another. It’s a fucking shell game. Our bailouts of Detroit will run us as high as $130 billion, so we print more money to artifically inflate the market, then we take the asset (clunker) we purchase and we destroy it, so that $4500 probably turns into 3X the hit to our Nation’s books. Only in DC could this type of thinking be considered a “success”.


    Here’s another take:

    “As economic stimulus the program is bogus as well. The money allocated is enough to generate about 250,000 trade-ins. While that may seem like a lot, about 200,000 would have happened anyway industry experts say.If taxpayers are spending $1 billion for about 50,000 additional car purchases that comes to about $20,000 per car.”


    I have relatives that operated a small town SD Chevy/Pontiac/Buick dealership for the last 69 years. Of course, they were one of the ones who got their dealerships pulled and now this company will have to continue on selling used cars. Well, this program has now fucked over their used car business as well since folks are dumping their clunkers at big city dealerships as opposed to selling them. These guys would take an older car, fix it up, sell it and God forbid, make a little money in the process. Now they can’t even get used vehicles to fill up their lot. How do you suppose all the mom & pop repair shops and part suppliers are doing these days?

    As I’ve said before, Small businesses are 99% of all companies. When they make some money they will expand and hire and employee or two. That is what has and will lead us out of this recession.

    Obama and this current crew in DC has no fucking clue as to what they are doing and they are killing small businesses in this country.

  8. Sy- funny you would be against this. I know of a certain business getting a HUGE tax cut for buying more efficient equipment for their business, I think you mentioned it at one time. What is the difference if the Feds offer incentives to consumers or businesses as long as it creates jobs and helps consumer confidence?

  9. Angry Guy on August 5, 2009 at 12:14 pm said:

    Why destroy the vehicles? I don’t get it?
    Isn’t there some other use for these cars? Non profits to donate them to? Something?
    Seems wasteful and stupid.

  10. You are referring to the $250K accellerated depreciation for equipment purchases.

    Different animal altogether, your tax dollars aren’t being funneled directly to me to buy new machinery. The depreciation allows me to write down the purchase faster, so I pay less in taxes over the lifespan of the asset. The idea is for it to allow growth (sell more stuff, hire more people) etc. which will actually generate more tax revenue in other areas like payroll, sales, excise etc.

    Cash for clunkers is costing jobs at small dealerships (as I noted), repair shops, parts suppliers, and it isn’t going to save Detroit, as when this round of fenzied buying is over, they won’t sell shit for months.

    Also, how many folks you suppose are in debt up to their eyeballs went out and bought a new car they can’t afford to insure, license or even operate?

    If this type of Economics was in any way practical or successful, you’d see the former Soviet bloc as the lone superpower and Cuba would be like a small Japan.

  11. Plaintiff Guy on August 5, 2009 at 12:24 pm said:

    This takes the Ford Exploders off the road, conserves fuel, and helps the environment. Probably the best way to turn around this SUV culture. It’s better than bank bailouts. They used funds to pay themselves bonuses with money never reaching the public. Yes, we must eventually pay up. However, today’s dollars are worth more spent now. High debt, an economic downturn, and runaway costs leads to inflation. Inflation that was postponed and should have been happening during Greenspan years. If you need a car, buy it now. You’ll not be able to afford one later. The dollar will be worth less and oil will cost more such that cars cannot be imported. Auto manufacturing jobs will return to middle america.

  12. AG, for the dealer to get reimbursed for each $4500 the car has to be scheduled for demo, and yes it is wasteful and stupid.

  13. Oh, and Costner, the reason you’ree seeing so many Ford Explorer’s being traded is for many of the years this program is targeting that was the number one selling vehicle.

  14. Sorry, Sy, not buying it. You paying less in taxes is the same as the feds giving incentives. Someone had to build those fuel efficient new cars, someone had to pay taxes on them and someone had to sell them.

    Don’t be a hypocrite.

  15. AG- the whole point of the program is to get these POS cars off the road, that is why they are being destroyed. I also heard today that the salvage and recycling business is booming from it, less steel we have to buy from China.

  16. Braden on August 5, 2009 at 1:48 pm said:

    I think the program is good, not great.

    For one thing, I wish there were provisions for more money for American-made cars, or if only American-made cars were eligible for the program. I know the WTO and free-traders would get mad at us, but it would definately help our auto industry.

    And I agree that while the clunkers should be scrapped, you could still sell some of the used parts. Hopefully they are doing that.

    Sy- tax rebates to improve energy efficiency is not comparable in any way to the Marxism of the Soviet Union or Cuba. But thanks for the laugh.

  17. L3wis,

    Under the old law, it would take me a decade to depreciate out an asset like a truck or machine. Under the new one, I can do that faster and I take the deduction off the taxes I pay in say 4-5 years. The Govt. still gets it’s share, just under a different time frame. And as long as I make a profit for them to tax.

    So if that means I make more profit, well guess what happens to those dollars? If I leave them on the bottom line I pay the highest Federal corporate income tax rate of any of the G8 industrialized nations. (look it up) If I bonus myself, I pay whatever personal income tax rate plus FICA. If I buy a company boat I pay taxes on that as well. If I buy more inventory, I get to pay the taxes on that too.

    Beginning to see a pattern here?

    You see, there really isn’t that much of an “incentive” for me to buy the machine, unless it yields enough productivity gains to make it worthwhile. If there are, than all of the associated activites derived from the increased production is taxed in one way or the other. Not only on what I do, but also on what the machine manufaturer does on one end of the spectrum and the end user on the other.

    This is the same principle, the one which was soundly rejected by Obama, as to when you lower the top tax rates on individuals, revenues to the Treasury actually go up, due to more activity from the cuts. Obama said the tax code needs to be more “Fair” so that’s why he’s committed to soaking the rich, even though it will lead to less revenue.

    Again, only in DC would this type of “logic” be taken seriously.

    The CFC program costs us $20K or more per car and it is hurting other businesses that sell or repair used cars. The acclerated depreciation benefit (which is also going to be phased out by Obama) hurts no one at all. Go fuckin’ figure.

  18. braden,

    “Sy- tax rebates to improve energy efficiency is not comparable in any way to the Marxism of the Soviet Union or Cuba. But thanks for the laugh.”

    No problem, simpleton. What I’m saying is when you have a centrally planned Economy, it doesn’t matter if you are resource rich (USSR) or not (Cuba). These systems fail every time because there’s no profit motive to increase the country’s overall standard of living. They all share the same level of misery, equally, unless you are a member of the ruling class.

    Don’t take my word for it, take a trip or two and see for yourself.

  19. Costner on August 5, 2009 at 2:59 pm said:

    “Sy- funny you would be against this.”

    Actually it’s not funny at all. It is a idea from the Democrats that has been hugely successful and some economists have stated it’s impact to the economy will be far greater than the total expenditure due to the snowball effect.

    Thus, the talk radio crowd has now started whining about it and trying to find fault in the program rather than admitting it is doing exactly what it was designed to do…sell some friggin’ cars and stimulate the auto industry.

    Sy’s line about spending money we don’t have or shifting from one taxpayer to another is a verbatim talking point from talk radio the past few days, so it was only a matter of time before old Sy here repeated it like a parrot. The problem is, the point is moot. We are in a down economy – it is a known fact the government is spending money “it doesn’t have” because with rare exception during the Clinton era, that has been the status quo.

    We are talking about $1 Billion dollars so far and possibly another $2 Billion to add to it. That is $3 Billion which seems like a ton of money until you realize the wars in Iraq and Afghanistan have cost us over $900 BILLION!

    So yea – we didn’t have that $900 Billion either… but we still spent it, and I still don’t hear the talk radio crowd or Sy whining about it because it was a Republican expenditure rather than a Democratic one.


  20. Costner on August 5, 2009 at 3:04 pm said:

    AG: Why destroy the vehicles? I don’t get it?
    Isn’t there some other use for these cars? Non profits to donate them to? Something?
    Seems wasteful and stupid.

    Nothing says they have to be destroyed. The law merely mandates their drivetrains need to be removed and scraped / melted down. However, if the vehicle has salvage value for parts (fenders, glass, seats, etc) those parts can be sold.

    The problem with allowing these cars to be donated is it keeps another car on the road, and that doesn’t help sell more cars because the net effect would be zero. In order to stimulate the auto industry, these cars have to be removed from the “pool”… it is just a matter of supply and demand.

  21. l3wis on August 5, 2009 at 3:13 pm said:


    Not to mention that there is plenty of fuel efficient clunkers poor people can buy.

    Sy- Still not buying it. Apples are apples, if you as a business man are getting an incentive to help with efficiency, jobs, and tax base why doesn’t the working joe deserve the same? The less money joe blow spends on gas, the more he will spend on other stuff, it all goes back in the kitty.

  22. Costner:

    “Sy’s line about spending money we don’t have or shifting from one taxpayer to another is a verbatim talking point from talk radio the past few days, so it was only a matter of time before old Sy here repeated it like a parrot. The problem is, the point is moot. We are in a down economy – it is a known fact the government is spending money “it doesn’t have” because with rare exception during the Clinton era, that has been the status quo”

    Costner, your attack the source vs. debate the point is strait out of the DNC and White House playbook. Shocking indeed.

    It’s wearing thin, but I can see why you do it. If you only have one club in your bag, you gotta swing it.

    I’ve been advocating fiscal conservatism a long damn time, whether you want to acknowlege that or not. We were in a down economy in Clinton’s first term as well. He and Hill tried the same Univeral Care trick back then and they paid the price by losing Congress.

    It was only then that Clinton came around to signing off on Welfare Reform and balancing the Budget, so you can hold your nose and thank Gingrich too while you’re at it.

    So, if crazy deficits and spending were wrong under Bush, how is twice that amount right under Obama? You can try to moot that point but we have NEVER spent so much, so fast, to so many targeted groups in such a reckless fashion in our Nation’s history. $39K worth of federal debt for every man woman and child. Deficit over $1 trillion for the first time ever. Unfunded liabilites over $55 trillion = $191K for every person in this country.

    Take a peek at this, everyone should have it for their screensaver:


    I also have brought real world examples into this discussion to prove my point. Got any of your own? Or would you like some of my relative’s SS#’s so you can trash them out?

  23. Costner on August 6, 2009 at 6:42 am said:

    Costner, your attack the source vs. debate the point is strait out of the DNC and White House playbook. Shocking indeed.”

    Actaully Sy I did debate the point – and showed it was total rubbish. You like to pretend I dismiss your parrotted talking points just because I know the source they originate from, but in fact I simply call you on your re-hash Rush monolouge while showing you the error in your regurgitated logic. Call it a two for one deal, but clearly I didn’t just attack your source as you might claim. (Nice attempt to shift the debate though)

    As to your “real world examples” that is a load of shit as well. I can say I have a relative who is profitting from this program too… but that really doesn’t mean anything and it isn’t real evidence. If Brooks Motors in Sisseton is told they have to close and all of the sudden they are forced to sell used cars that is because of one reason – they never sold enough new cars. So remind me again why we should reward failure?

    The thing is Sy you are trying to have it both ways. You complain that your relatives are losing money because “they can’t even get used vehicles to fill up their lot”, but a paragraph earlier you were trying to convince us this program has only resulted in an additioanl 50,000 cars sold.

    Are you kidding me Sy? If there were only 50,000 cars sold via this program – in the ENTIRE NATION, then your little small town relatives can’t possible even notice. I’ve driven by a few dozen used car dealers in our area and I haven’t noticed any of them struggling to find inventory, so once again you are reaching into your shallow well of excuses to find some reason to attack a program for no other reason than it stems from the Democrats.

    I hate to break it to you Sy, but even if your small town relatives are losing a small amount of business I could give a shit less. I’m looking at the big picture here, and it is a hell of a lot more important that we get our auto industry back on it’s feet while reducing the need to import oil than it is to keep your family’s used car business in the black.

    When someone trades a used car in for another used car, it doesn’t exactly help to produce more new cars. Sure indirectly it might, but the impact is questionable. On the other hand if someone buys a new car and the old one is scrapped, it requires another new car to be produced. This requires labor to build the parts, labor to build the car, suppliers ramp up, dealerships make sales, raw materials orders increase and the snowball continues. Do you honestly think you can even compare the impact of a new car being produced to that of a used car being sold?

    Then again I realize it is nearly impossible to expect a Republican to think of anyone outside of their immediate family or themselves, so asking you to look at the big picture is probably like asking Rosie O’Donnell to share her cheesecake… a fruitless effort.

  24. Costner,

    No, you really didn’t debate shit. You pulled your Rush club out again and then proceeded to change the topic to Iraq and Afghanistan, all while accusing me of shifting the debate.

    Then you say my examples don’t mean shit, but of course, your drive by of a few dealers is solid evidence.

    To top it off, you prove what true scum you are by not only calling out my family members, but insulting them as “small town” and “failures”. They didn’t fail, they got their dealership pulled by Obama Motors. They will be forced into selling used cars, and CFC is artificially altering the used car market and repair market.

    Never mind the fact that CFC was poorly planned, underfunded, a total logistical clusterfuck and poorly executed. Wait until the 4th quarter when the demand snaps back the other way as it always does, you’ll see the worst 4th Q ever for the automakers and morons like you will be screaming for billions more $$ for CFC 2.0. Why don’t you point me to one of those mystery Economists who advocate printing money on one hand to bail out Detroit and printing more money on the other to pay people to buy cars that most don’t need and most will probably be going deeper in debt for? If that’s your idea of “hugely successful” than you are a truly pathetic, condecending and ignorant piece of shit.

  25. Costner on August 6, 2009 at 1:04 pm said:


    First of all I didn’t shift the debate to Iraq and Afghanistan… I used that as a reference to show how ludicrious it is to make a point about spending money we don’t have. You can pick whatever item you want from the federal budget, but considering we have been spending a deficit levels of decades it just goes to serve as an example of how feigning outrage over spending money we don’t have (while being perfectly fine with $8 Million of Federal Pork to move some railroad tracks) is incredibly – exponentially – hypocritical.

    Second, my point about your example is that you are looking at the small picture. Your one example is not sufficient to suggest the program is a failure just because you have a relative who might – and that is a HUGE might – lose a little money.

    The fact is, this program hasn’t been in effect long enough for you to know the impact… so as with most things you are basing your opinion on assumptions which are in turn based upon worse case scenarios mixed with statements based upon fear mongering and scare tactics.

    Third, I never called out your family members because I haven’t a clue you who are much less your family – and frankly I don’t care. If you are talking about Brooks motors I used that as an example because I happen to know the Brooks family and grew up in the area dipshit. If it just so happened that you are their third cousin twice removed then that is just coincidence.

    However, Brooks hasn’t sold many new cars and have been struggling for several years. A few decades ago they actually sold more cars when Alinder Ford was still in business, but when the Ford dealer closed shop their business continued to falter to the point the vast majority of their business is based upon lease returns they bought at auction.

    In fact, the one major gripe Brooks has about losing their dealership is that they can no longer go to the factory auctions to get the program cars…. but because they were selling more new program cars and not putting any effort into selling new cars – well they brought it on themselves.

    You can claim this was a decision by Obama Motors all day long, but the fact is it is a purely economic decision. GM made the call and it didn’t make any sense for them to support all those dealesr who weren’t selling cars. Industry stats show that fewer dealerships actually benefits the automaker, and in comparison to their peers, GM was (and still is) bloated.

    So yea Sigh – if a new car dealership isn’t selling new cars, and if their dealership is pulled because of it… they are a failure. You can call it an insult if you wish, but frankly it’s just a fact. If Brooks (or whatever other dealer you wish to use as an example) was selling 200 new Chevy’s every year – you can bet your ass they would still be open.

    So I guess this is one “truly pathetic, condecending and ignorant piece of shit” that seems to think you haven’t got a clue what you are even talking about.

    What else you got Sigh?

  26. Costner:

    “First of all I didn’t shift the debate to Iraq and Afghanistan… I used that as a reference to show how ludicrious it is to make a point about spending money we don’t have.”

    Huh..again a “reference” when you make it, but a “red herring” or “diversion” when I make it. I can see why you are such a fan of the “do as I say, not as I do” crowd.

    Feel free to cling to the idea that folks calling for fiscal restraint are irrational or ludicrious or whatever else. Those chickens will come home to roost in ’10.

    “The fact is, this program hasn’t been in effect long enough for you to know the impact.”

    So, you are full of shit by parroting the “hugely successful” line over and over. Glad we can agree on that.

    “Third, I never called out your family members…”

    I’ll take you at your word and apologize for my comments on the coincidental naming of Brooks Motors. They did what they had to in their market and they lasted through many previous recessions. No reason they couldn’t have kept at least one line for them so folks aren’t driving 60+ miles to buy or service a new car. People won’t do that in Sisseton or any other rural area. They will simply buy used cars and have them serviced by their local mechanics or themselves. Beyond that, Brook’s reliance on program cars certainly benefited GMAC and GM as a whole as they kept the secondary market going, which helps the primary one. It also helped those customers who just didn’t want to or could afford to shell out $25K or more for a new vehicle. Plus, if they indeed shut down, those are more lost jobs, tax revenues and one more nail in small town USA’s coffin.

    Sooner or later these policies will hit you where you live or close to home, Costner. I certainly hope you remain consistent and as glib when it’s your turn to take a bite.

  27. Costner on August 6, 2009 at 6:52 pm said:

    “Feel free to cling to the idea that folks calling for fiscal restraint are irrational or ludicrious or whatever else.”

    Oh come down off you little cloud. You and I both know this has jack shit to do with fiscal restraint and everything to do with an idea that Democrats had that by most accounts is spurring new car sales can’t possibly be seen as a positive sign of a recovering economy because that would actually mean the Obama administration did something right for a change.

    Aside from that, you once again show your party affiliation with the “I only care because it impacts my family” bullshit, and that is what continues to be wrong with the Republican party and the right.

    You will obviously disagree with that and claim it is everyone who only looks out for number one, just as you assume I’ll change my tune when “these policies” hit close to home. However that is where you would be wrong – because there is actually one major piece of legislation being considered right now that will guarantee one of my family members to lose her job as well as threaten a large share of my yearly income… but you know what Sigh… I actually think it would benefit our nation as a whole so it is rather difficult for me to bitch and moan about it.

    Now granted if it does happen I’m not going to be jumping for joy, but I’m also not going to find excuses to berate the idea just because I’m not a Democrat or just because it might cost me financially. Call me crazy, but the benefits of the many outweigh the benefits of the few… even when those few include me and my family.

    By the way Sigh, when I made the “hugely successful” line about the CARS program that is based upon the reports flying in about how fast the money was used up, the increase in sales being reported all across the nation, and the utter glee car dealers seem to be experiencing. Now granted I suppose the entire media machine could just be reporting the upside because as we all know it is just a state run media liberal conspiracy and all… but I guess I’m going to have to go with them on this because that is just tough to fake.

    Now in turn when I made the comment “this program hasn’t been in effect long enough for you to know the impact” I was obviously referring to the impact upon the secondary used car market – because that impact cannot be witnessed immediately and anyone who claims otherwise is full of shit… and when I say “anyone” that pretty much includes you.

    I thought that difference was clear, but obviously not, so hopefully that will help you understand the difference in the two sides of the issue. Now that said, there is no way anyone can tell me the used car market will take a significant hit from this, and as I said in a previous post the benefits outweigh the negatives due to what it takes to produce a new car versus re-purpose a used car.

    I equate this to John McCain making a statement about how eBay is the future of the economy without realizing a nation can’t prosper when people sell each other their used shit back and forth. Real growth only happens with NEW products, and frankly when the cars being traded in are destroyed, it results in one less used car – thus the price of existing used cars might actually increase which in turn could result in higher profits for the used car dealers.

    Now I’m not claiming to know what will happen, but I suspect it won’t be any worse than when the leases started expiring from all of those “employee pricing” specials a few years back when dealer lots were instantly flooded with 3 year old vehicles making trade-in values retract as a result. Therefore, unless you know something I don’t know… I still say nobody has a clue about the impact to the used car market.

    Thus – it seems the only one full of shit here is that guy you continue to see in the mirror. Carry on.

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