If a dummy like me can figure it out, what’s wrong with Congress?

Sailing to Mel's AutoWorld

Sailing to Mel's AutoWorld

Last week I suggested that the reason the cash for clunkers program worked so well when manufacturer rebates did nothing is that the latter just allowed you to save some of your own money while the former allowed you to pick your neighbor’s pocket and have him subsidize your new car. Today the Wall Street Journal points out the same thing.

The buying spree is good for the car companies, if only for the short term and for certain car models. It’s good, too, for folks who’ve been sitting on an older car or truck but weren’t sure they had the cash to trade it in for something new. Now they get a taxpayer subsidy of up to $4,500, which on some models can be 25% of the purchase price. It’s hardly surprising that Peter is willing to use a donation from his neighbor Paul, midwifed by Uncle Sugar, to class up his driveway.

On the other hand, this is crackpot economics. The subsidy won’t add to net national wealth, since it merely transfers money to one taxpayer’s pocket from someone else’s, and merely pays that taxpayer to destroy a perfectly serviceable asset in return for something he might have bought anyway. By this logic, everyone should burn the sofa and dining room set and refurnish the homestead every couple of years.

I assume that Congressman Jim Himes learned something about economics at Lawrenceville Prep and even more at Harvard, so why did he vote for this boondoggle? For that matter, even if he’s from Cos Cob, he must be aware that we sailors would love a new Hinckley and surely a boat-builder’s job is as important as an assembly line worker’s in Detroit? Why not pass out $450,000 new boat subsidies and put Maine back to work? It’s all funny money anyway and doesn’t cost anything so where’s my check?

It could have something to do with the fact that boatworkers don’t belong to the UAW, you think?

2 Comments

Filed under Uncategorized

2 responses to “If a dummy like me can figure it out, what’s wrong with Congress?

  1. '73Refugee

    Borrowing via 30-year (or 10 or whatever) bonds to buy a car that might last 5 is a smart use of money according to our betters in government and their media acolytes.

  2. Butch Cassidy

    Yeah but……had they said “you can only use your subsidy to purchase a Chevy or Crystler-(taxpayer owned) it might have been almost ok………but nooooo…….use your subsidy to buy any foreign make u desire. idiots