Wednesday, July 29, 2009

Cash for Clunkers = Redistribution of Wealth

Obama didn't lie when he said he wanted to "spread the wealth." The Car Allowance Rebate System, which almost everyone in America knows of as "Cash for Clunkers" is nothing more than a redistribution of wealth. Being disguised as a necessary and even "creative" way to spur economic growth in our nation is actually nothing more than a big scam with underlying motives.

This program allows qualified buyers to receive a $3,500 or $4,500 voucher towards the purchase of a new car. There is approximately $875 million in federal funds allocated to the program. Here are my objections to such a ridiculous program:

1) Government picks winners and losers

Let's say I bought a new car earlier this year, scrapping my old car. How come I didn't get federal funds to help subsidize my purchase? How come a few months later my neighbor received federal funding, just because their car lasted a few extra months? Simply put, the government is choosing winners and losers based on timing of automobile purchases. How does this make sense?

2) Artificial Demand

Of course there are individuals who would be purchasing new cars anyway, but there will definitely be a number of individuals who buy a new car sooner than they need to. This is not market-based demand, but artificial demand created by the federal government. Call me a skeptic, but isn't Obama's credibility going to be padded if GM sales increase? A quick growth just months after he "fixed" the failing company? Hmmmm....

3) The real goal: get higher mileage vehicles on the road

"The program is designed to...put safer, cleaner and more fuel-efficient vehicles on the nation's roadways."

Translation: We are using federal dollars to put cars with higher gas mileage on the road, one of the goals of the green movement. I have no trouble with the environmentalists...except when they try to push their agenda through government thereby forcing everyone else to comply. This is clearly taxpayer dollars being used to enforce a green agenda.

My friend's car was 2 mpg over the 18 mpg standard, so he didn't qualify. Would a new car be safer than his older car? Absolutely. But sure enough, in reality the goal is to force people to buy hybrids and fuel-efficient cars, even if that is not specifically what they want.

Interestingly, the government wants to push fuel-efficient standards in the United States to unthinkable levels in the near future. All because of global warming, which many in America are skeptical about. Sure enough, even if they don't agree that global warming is a threat, they will be forced to comply with the majority's decision.

Ultimately what it comes down to in my opinion, is whether or not this is a proper role of the Federal government. Picking winners and losers, stimulating artificial demand, and advancing a mandatory green agenda just doesn't meet my standard of a "necessary role" of government.

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