Is it just me or does anyone else think this cash for clunkers program is a waste of good taxpayer money? Is this program really generating more car sales or is it just pulling demand forward?
The Wall Street Journal had an excellent story today about the program which was written by Jeremy Anwyl who is CEO of Edmunds.com (a wonderful online car buying guide).
Mr. Anwyl presents some interesting research to support the idea that this program likely did not actually increase sales. He makes the case that many buyers delayed purchasing until the program was launched. He also makes the case that future sales will be reduced because many buyers simply purchased now instead of later (i.e. demand was pulled forward).
What this program really shows is that with enough government subsidies, consumers will spend. But did this program really generate any value? Did we not just take from one taxpayer and give to another taxpayer? I guess if we as a country are comfortable with borrowing more money, we could subsidize many other industries (besides banks, auto companies, real estate, name your favorite industry…).
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