Friday, July 10, 2009

Cash for Clunkers

We tax all the others and pass the revenue on to you

There are these two fellas, see? Joe and John. They both own clunker pick-up trucks that you or I wouldn't be seen dead in. Well, I might, seein's I drive an '88 Ford F-150. But I digress.

They both would really like to buy new pick-up trucks. Problem is, Joe can afford one and John can't. So, who does the gummint help buy his new truck? Why Joe, of course, the guy who could buy one without any help. He does allow, though, that he didn't mind the free $4,500 "cash for clunkers" that he got from the gummint. John, who really did need help to buy a new truck, gets to keep his clunker. You know, the one that's overheating the earth and all? The one like mine? No help for ol' John.

Does this make sense to you?. We paid Joe money that he didn't need in order to get him to buy a new truck sooner than he intended. That helps Joe (duh, free money and all), the UAW and it pays back some political debts. Plus, everyone in the picture where Joe gets his new keys gets to smile.

On the other hand, that's John over there, shaking his head and wondering " I work and pay taxes too. Why is the gummint giving my tax money to Joe so that he can buy a truck that I can't afford when I'm the one who needs the help?"

That's the conundrum: Why are we giving money to people who don't need it? Why are we pushing Joe into further consumer debt as a matter of national policy? Consumerism and mass consumption are NOT good for Joe or John or for you. The administrations sells cash-for-clunkers as one way to reduce our national dependence on foreign oil. It may be, but at what cost?

The thing is, Joe was gonna buy a new truck anyway. Maybe c-f-c motivated him enough ($4,500 of enough) to buy it a little earlier than he had planned but he was gonna buy it anyway. Count one truck sold. OTOH, if we had helped John buy a truck (in the same way, say, as we're helping banks and car companies who need some help to get back on their feet) then we could count two trucks sold and two clunkers off the road, more car jobs saved, the whole shebang. For the math-challenged, two is better than one.

Unfortunately, only the "haves" get the c-f-c incentive. "Have nots"? Sorry, not you, you gotta keep driving your clunkers. "You gotta have money to get money" is a perverse modern twist. Our national divide grows. There's a better way:

Hey gummint! Don't give away our hard-earned tax dollars to incentivize consumerism. There are too many other problems on the table and this doesn't fix any of them long-term.

Let the people who can afford new trucks buy them, but don't help them buy them. Let the folks who can't buy new save their money or buy used or take public transportation (you know, those systems you told us would solve our transportation problems?) or, God forbid, walk or carpool.

Count on it: The administration is selling us out to pay for its stimuli and bailouts. Did anyone NOT see this coming? I wonder how many Obama voters thought he would wind up being an auto industry shill?

"C'mon down! We got 45 hunnerd bucks an' a shiny red truck right here for ya'll, but don't wait!"

Wait. Consumer debt shifts the economic crisis to you.

The gap in our economy is between what we have and what we think we ought to have - and that is a moral problem, not an economic one. Paul Heyne

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