Regular readers of this site will know that I am no leaping cheerleader of Cash for Clunkers, the government's auto revitalization program that gives away up to $4500 for new cars. We shouldn't be paying people do destroy working capital, it's rotten for used-car dealerships (who actually do something with the old cars besides junk their engine) and its apparent popularity is, I think, the product of historic pent-up demand for cars, which means we're paying people thousands of dollars for cars they might have bought later this year anyway.
Today I've stumbled upon two pieces of information that make me proud of trying to sound the alarm of C4C -- but also a bit sad for those billions of taxpayer dollars.
1) How environmental, again?
The environmental bonafides of this program have long been under question. Even though the program requires buyers to update to a more efficient vehicle, it's much easier to qualify for a rebate if you're buying an SUV than a car. On the one hand, a small miles-per-gallon upgrade among hoggish SUVs will make a bigger net difference in emissions than a medium-sized MPG upgrade improvement among cars that are already fuel efficient. On the other hand, the program seemed stacked to encourage more SUV purchases.