If we wanted to be even trickier, we'd stop giving handouts to the auto dealers and give credit to consumers who are struggling with unemployment, the mortgage crisis, and everything else. If we'd turned the $2.87 billion into loan guarantees we could have offered $57.5 billion in low interest auto loans--enough to finance 3.8 million cars at $15k a pop. Now THAT would have created a LOT of jobs. Better still, the loans would have helped working families save money on car payments (which for people with shaky credit can easily run to 18 % interest) and on gasoline.
Gasoline: Another missed opportunity. If we'd made only cars getting 32 mpg or more eligible for the loans we could have saved 855 million gallons of gasoline a year. Much much more than 38 million.
And if you're not riled up enough:
See UC Davis economist Chris Knittel's excellent work on the implied cost of carbon in Cash For Clunkers.
And here's a consumer-action warning that some dealers may be "double dipping" from both consumers and the program.
(Photo: Flickr User Tony the Misfit)