Cash for Clunkers is a Real Lemon

According to the White House, the Cash for Clunkers program was designed to do two things. It was supposed to get older, gas-guzzling vehicles off the road and stimulate the automotive industry by providing an impressive financial incentive for people to buy newer, more fuel efficient cars.

With payouts ranging from $3,500 to $4,500 per car, the program burned through its allotted $1 billion in a single week. Cash for Clunkers is proving to be just another knee-jerk attempt to appease the masses by throwing billions of dollars at a problem whose root is indefinable.

Like other stimulus packages offered up by the Obama administration and Nancy Pelosi's oblivious congress, the program may have seemed like a good idea on Capitol Hill, but down here in the real world, it has some major issues. In my opinion, here are the two most obvious problems with the Cash for Clunkers deal.

Problem number one: Before we entice people to buy things, particularly high-dollar items like cars, I think we should have spent more time trying to figure out how to help them get jobs so that they have the money to spend in the first place.

The unemployment rate is still climbing. Banks are making loans for new cars, but only to people with perfect (or nearly perfect) credit. The people who really need the incentive can't afford to buy a car anyway.

Problem number two: While we should certainly do our best to try to support all of the industries here in the U.S., one of the original intentions of Cash for Clunkers was to boost sales of American cars.

According to the National Highway Traffic Safety Administration, the top five best selling cars under the Cash for Clunkers program are: 1. Ford Focus, 2. Honda Civic, 3. Toyota Corolla, 4. Toyota Prius, and 5. Ford Escape. Of the top ten models being purchased under the program only four are built by a domestic auto maker.

I think if the government is going to fire hose our tax dollars at people to get them to buy cars, the deal should have included a restriction that the vehicle be manufactured by one of the Big Three. I know it's not politically correct to be pro-American these days, but I'll just have to try to find a way to live with myself.

Anyway, it would just be good business sense - especially considering how much of the American auto industry is owned by the U.S. Government. Stimulus money that goes towards the purchase of a Toyota or Mazda instead of a GM or Chrysler product is like Kroger giving out coupons for Wal-Mart products.

Spare me all of the arguments about Honda being built in Ohio and so on - the money goes back to Japan - and they already get federal tax breaks to send it there. Why should we give import car makers more of our tax dollars?

I would imagine that used car sellers will be heavily impacted by the program as well. If the vehicles being traded in are being destroyed - and they are - then there is nothing for used car dealerships to resell.

That seems counterproductive, considering that some former GM and Chrysler dealerships that have converted to selling only pre-owned vehicles purchased from dealer trade-in auctions. Eventually, if this program is expanded, the used car industry will suffer and more people will be out of a job.

With the "success" of Cash for Clunkers, Congress is now debating a proposed $2 billion increase for a program that gobbled up half that amount in only one week. Proponents say the added funds will keep it running until the end of October. Are they kidding?

I have decided that politicians simply can't add. Ladies and Gentlemen of our national legislature - you spent ONE BILLION dollars in one week - that's just seven days. How, exactly, do you plan on making only twice that amount last for two months? (Insert echoing cricket sounds here.)

It's likely that Pelosi and the rest of her congressional goons wouldn't hear our complaints anyhow. They are all too busy trying to figure out how to hang on to their environment-choking Hummers and gas-hogging limousines.

Maybe we should spend some of that stimulus money on an official congressional calculator and help our elected officials do the math.

Follow columnist Gery L. Deer on Twitter - just visit www.gerydeer.com.