FRONT PAGE CONTRIBUTOR
Reconciling the paradox: how popular *is* Cash-for-Clunkers?
If you’re wondering how to reconcile the apparent paradox that the Cash-for-Clunkers program can be simultaneously popular…
The federal government’s new “Cash for Clunkers” program got off to a rousing start over the past two weeks, with some new-car dealers reporting dozens of deals completed in just the first few days.
Officially, the program began July 24 when the government released the final rules. The first flurry of activity kicked in over the first week — when the program came close to running out of money — and is continuing now only because of an infusion of $2 billion more, approved by Congress.
Fifty-four percent (54%) of Americans oppose any further funding for the federal “cash for clunkers” program which encourages the owners of older cars to trade them in for newer, more fuel-efficient ones.
A new Rasmussen Reports national telephone survey finds that just 33% of adults think Congress should authorize additional funding to keep the program going now that the original $950 million allocated for it has run out. Thirteen percent (13%) are not sure.
…it’s because there are two, equally valid definitions of ‘popular’ at work here. The car industry is seeing higher sales and general interest from their pool of potential buyers – as well they should; the government is partially deliberate subsidizing new car sales for a portion of the population. Hence, from a dealership’s point of view, the program is popular. More people are buying cars. Meanwhile, the electorate – which largely consists of people who are not eligible for this program, and who know it – is justifiably skeptical of it, and don’t particularly want to see it progress.
I note this mostly because I suspect that there are a few politicians out there who are working under the assumption that “behaviors that car dealerships / people who bought gas guzzlers like” equals “behaviors that voters like.” I suspect that I will look forward to this being straightened out at the polls next year.
PS: One correction to this article (“Cash4Gold Beats Cash-For-Clunkers Hands-Down”): the tax liability that the $4,500 represents isn’t limited to the person who traded in his or her vehicle. It’s going to be shared by pretty much everybody who pays taxes. And that is at least slightly annoying to, say, a person who bought a fuel-efficient car in 2001, kept up with the maintenance on it for six years, then finally only sold it when the AC permanently died and the trunk lock got busted.
Crossposted to Moe Lane.