While not even a wash for the US taxpayer, Cash for Clunkers was a bonanza for foreign auto makers.
They can thank the UAW. This is because 59% of clunker-stimulated sales went to foreign-branded cars with the Toyota Corolla and Honda Civic taking top slots. As if these models needed any stimulus.
Sure US automakers saw their sales go up as well, despite their vehicles being clunkered in droves. But the USA lost as a whole.
Americans fooled themselves into destroying useful vehicles in order to take $4,500 loans likely from foreign investors, likely the Chinese or Japanese, who buy our debt. This is because Americans received a $4,500 cash rebate balanced by $4,500 future tax liability from added government debt, much of which will be owed to our largest foreign creditors. It’s now clear that, inadvertently, they took these loans in order to buy redundant cars from mostly foreign companies. Thus any apparent near-term benefits seen in the economy are illusory and come at the expense of future generations.
Not even mother earth won if you consider the massive amount of energy it takes to build a new car vs. only incremental improvements in fuel efficiency from switching now. It would have been far more efficient to let the current vehicles die off, and then shift into even more efficient cars of the future.
Cash for Clunkers: good riddance.
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