Cash for Appliances Up Next as Cash for Clunkers Runs Out of Gas

With Cash for Clunkers running out of money long before expected, attention is now turned to the next stimulus money grab dubbed "Cash for Appliances". Despite being announced back in July, the Cash for Appliances program is now gaining attention in the press. According to the DOE press release dated July 14, nearly $300 million in funding from the American Recovery and Reinvestment Act will soon be released to states to run rebate programs for consumers wishing to replace their appliances with newer, more energy efficient models bearing the Energy Star logo. The money for this new Cash for Appliances program is to be divvied up by state, based on population.

Top 5 states set to receive the most funding from Cash for Appliances program

Not surprisingly, because the Cash for Appliances funds are to be given out based upon population, California is expected to reap approximately $35 Million to fund their rebate program. California has been plagued, almost Biblically, with financial difficulties ranging from the state offering IOUs in lieu of tax refunds, an astronomical foreclosure rate and budget shortfalls galore. Associated Content's Sylvia Cochran has had her fingers firmly on the pulse of California's money problems for months now, actively reporting on these very issues. Still, is $35 Million dollars worth of new appliances going to give California that extra boost to recovery considering that it is ranked Number 2 in foreclosures by Realty Trac in foreclosures, and has been for the past few months. Incidentally, California has the 5th highest unemployment rate in the nation.

Texans are poised to receive the second largest award of stimulus dollars at approximately $23 Million dollars. Texas is a middle of the road state, ranked Number 20 for unemployment at just under 8%, comfortably less than the national average of 9.4%. Texas currently ranks 25th in foreclosures.

New York's share of the Cash for Appliances pie will amount to $18.7 Million. New York's unemployment rate was 8.6% in July 2009, nearly a full percentage lower than the national average, while being ranked at Number 28 for foreclosures by RealtyTrac.com.

Also reaping a huge chunk of the $300 Million in stimulus funds is Florida, set to receive over $17.5 Million to fund their Cash for Appliances program. Florida has been hit hard by the housing crisis and comes in fourth in foreclosure activity. Florida has the 11th highest unemployment rate in the nation, with a rate of 10.7%.

Illinois is set to receive over $12 Million dollars of the $300 Million set aside for the Cash for Appliances program. Illinois' unemployment rate is 10.4%, earning it the rank of 14th worst in the nation. Adding insult to injury, Illinois currently ranks 8th highest in foreclosures.

Will the Cash for Appliances program work for states hit hard by foreclosures and unemployment?

Time will tell whether the Cash for Appliances program will work for states such as California, Florida or Illinois. These states are already suffering mightily with high unemployment rates and a large amount of foreclosures. Will homeowners in these states be lured by a rebate, which could be just a few hundred dollars? Homeowners currently facing foreclosure actions aren't going to focus on buying new appliances for a home they may not be able to keep long-term.

In contrast, Texas and New York have less foreclosures and lower unemployment rates. Residents of those states may well feel more comfortable making an investment in their home by purchasing new appliances through the Cash for Appliances program. Given the current economic conditions, I wonder how well this stimulus funded program will work toward getting America on the road to recovery. Three out of five of the states receiving the most money for this program are the ones suffering most from high foreclosure and unemployment rates. Who, pray tell, has the money then to spend on a new refrigerator?

How much money did your state get? Check out the DOE's spreadsheet to find out.

Sources:

http://www.examiner.com/x-5608-Little-Rock-Internet-Examiner~y2009m8d25-Cash-for-Appliances-offers-free-rebates
http://www.associatedcontent.com/user/69837/sylvia_cochran.html
http://www.bls.gov/web/laumstrk.htm
http://www.realtytrac.com/ContentManagement/PressRelease.aspx?channelid=9&ItemID=7192
http://www.energy.gov/news2009/7634.htm
http://www.energy.gov/news2009/documents2009/EE_EnergyStar_State_Allocations.pdf