Cash For Clunkers: The Program that Keeps on Wasting

Back in November, I wrote this story on cash for clunkers. It appears it still, STILL is terrible and continuing to be a complete waste.

The program let people turn in their old cars for up to $4,500 in cash to be used toward the purchase of a more fuel-efficient alternative. Nearly 700,000 vehicles were traded in through the program. 

But the Texas A&M University study, for the National Bureau of Economic Research, shows the program may have actually created a drag on the economy. While the program’s fuel-efficiency restrictions led to the purchase of more fuel-efficient cars, Americans ended up buying cheaper cars than they otherwise would have, the study found.

"Strikingly, we find that Cash for Clunkers actually reduced overall spending on new vehicles," the researchers reported, noting households "tended to purchase less expensive and smaller vehicles such as the Toyota Corolla, which was the most popular new vehicle purchased under the program."

Ya can't force people to do what you want. You can't strong arm an economy. People have this pesky thing called freedom of choice and they will choose to do what's in their best interest. Cultivating that freedom instead of curtailing it will make the country better.