The Cars for Clunkers program has been a surprising success. It was supposed to run through November but ran out of cash in less than four weeks, as consumers rushed to take advantage of a program that gave them $3,500-$4,500 rebates on new, fuel-efficient cars in return for junking their old gas guzzlers. (The consumer is supposed to also get the scrap value of the old car, which must, under the terms of the deal, be junked.)
This was a stimulus measure that, mirabile dictu, actually stimulated the economy. It moved 250,000 cars out of the nation’s showrooms in little more than three weeks. In the words of one auto dealer, “Wow.” By increasing the fuel efficiency of the cars on the nation’s highways, it also modestly lowered fuel demand. That cuts air pollution from automobile exhaust. That also puts downward pressure on oil prices, which in turn improves the balance of trade.
So here’s a congressional program that stimulates the economy right now while we are still in recession, cuts pollution, cuts oil prices, and cuts the trade deficit. And it does all that without requiring a vast bureaucracy to administer — and none of John Murtha’s friends had to be cut in on the action.
What are the chances of Congress moving money from other, far less effective programs to continue funding this win-win-win-win program?