One's Observations

A collection of some things I observe along the way.


Here are my thoughts on why this program was a bad idea. Remember, all this was supposed to be in the name of saving the planet but it has little to do with the environment and more to do with more restrictions from government and more suppression of the future economy.

1) This plan steals from the future market of purchasing new vehicles. It's basic economics. If a need is met now it is less of a need in the future.

2) It is a fabricated need in the market, not organic. By the government kicking back money; this is an artificial demand in the new car industry.

3) The "savings" to the buyer is coming at the expense of others, you and me! Tax payer money is being used to subsidies the expense of new vehicles. Where is it in the Bill of Rights that we are entitled to a new car?

4) It has already increased the used car market pricing and some estimate it will go up to 10% increase. The people buying used cars are not rich people so it will put more stress on those with less.
The "clunkers", that in past generations would be perfect first cars for teenagers or college kids, are now being destroyed to insure they are not operational. (Article)

Secondly, other countries, like China, are getting the scrap metal at basement bargain prices. (Article)

5) People with the financial means are not the main buyers. Most of the people buying are taking out loans for the balance of the price. So we now have more personal debt.

6) This is in disguise a bailout of the banking industry by creating these loans with the big banks that are in business with car dealerships. The little banks are the ones that get hurt here creating more "to big to fail" entities.

7) It is not really good for the American manufacturing industry as most of the cars bought are foreign vehicles. Granted most of the foreign car production is in American factories with American workers the money still goes to corporations based in foreign lands.
Ford, who to their credit rejected the government’s money, is doing better than other American car manufacturers, but they have a factory in Brazil employing Brazilians, not Americans. Secondly the top trade-ins are American made vehicles. (Article)

8) All these points add up to a reduced manufacturing labor force in the future which is in majority unions. So more government subsidies will have to go to the union groups to insure their workers are paid and have medical coverage with little or no work. Oh, and again, this is your money in the form of taxes going to the unions.

9) There are many stories of dealerships not getting their money in a timely fashion or not getting it back at all. Many dealerships are already barely getting by and stretching this reimbursement out could crush them. (Article)

10) This is a foot in the door to allow more "free money" from the government. Next are home appliances. (Article)

Above all of this, the most important reason in my mind is the Federal Government should have nothing to do with the free market. Stay the heck out of our lives!!!


LL said...

11. YOU BORROWED (along with every other American) the money you were paid for your clunker. Government money does not come from thin air... ok, not usually, these days when we're buying up our own Fed coupons it does.


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