There are three major implications to the Senate's vote late last night to renew Cash for Clunkers with an additional $2 billion. This week, expert opinion had rapidly spread from hearty endorsements by regional newspapers to a broader consensus in favor. But now that the program is really happening, skepticism is making a comeback. But so is creative brainstorming.
Economic Implications The Big Money's Bernhard Warner warned that the legislation "creates some problems" for car companies. "Automakers are faced with a dilemma: should they increase production or leave consumers to forage through lean car lots." Warner noted that, while the first round of Clunkers was a hit, as the supply dwindles so will the value of each successive trade-off.
Environmental Implications Differing from The New Republic's eco-endorsement, Adam Stein of Grist looked at the numbers and was less impressed. He called the program's carbon reduction rate "better-than-feared" but quoted an environmental expert who stated, "As climate policy, this wins no prizes." Brian Merchant of Discovery's Treehugger agreed. Stein suggested the program could be altered to require a greater fuel efficiency trade-up, noting that this would also solve the problem of demand outpacing supply.
Political Implications The Economist's Democracy in America blog saw the renewal as an "offensively cynical" political move. "If you want to save the environment and/or reduce America's dependence on foreign oil there are about a million things you can do before you resort to a $3 billion boondoggle," D.I.A. wrote. The blog argued that if Congress really cared about the environment or economy it would have "just raised the petrol tax like a normal country."
Cash for Freezers? Eco-blogger Stein, unsatisfied with Cash for Clunkers, argued that Congress should buy up old refrigerators instead. "Fridges are often the most energy-hogging appliances in your house," he wrote, explaining that new models are "vastly more efficient" and old ones are 95% recyclable.
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