Why would anybody be surprised — and some in Congress apparently are — that the government’s "Cash for Clunkers" program is wildly successful?
True, the American people can sometimes be a trifle dense about economic matters — we want a whole lot of government services, but we don’t want to pay any money for them. But Cash for Clunkers in any case doesn’t make a great deal of sense economically. The American public does, however, have a ready grasp of the concept of free money.
Uncle Sam gives you up to $4,500 to trade in your aging gas guzzler for a new, more efficient car. What’s not to like? In a giddy moment, Chrysler offered to double that but quietly dropped it when they began running short of cars. Whoever thought just two months ago that an American automaker would ever again have that problem?
The initial program was to be $1 billion to sell around 250,000 cars over the course of the summer and then revisit it to see if was worth extending. The car buyers burned through that $1 billion in less than a week.
The government was prepared to pull the plug on the program over the weekend, but Transportation Secretary Ray LaHood said it would make good on trade-in deals through Tuesday. Since the government is backed up in processing these transactions, the taxpayers could be on the hook for more than that initial $1 billion.
The House, knowing a popular program when it sees one, voted an extra $2 billion for the program before it went on vacation last week. The Senate, in Washington until Friday, still must act.
But the Republicans are reluctant to give more credit to the Obama administration for a popular program that works, even if it’s basically giving away money, and some Democrats are fretting whether environmentally we’re getting anything out of this. (The administration says yes, that the new cars get 61 percent better mileage than the clunkers and that motorists will save $700 to $1,000 a year in fuel costs.)
You can question the fairness of a program that takes money from all the taxpayers and gives it to favored consumers, in this case the car buyers, and you can question the economics of paying people to do something they would eventually do anyway.
But this is America. We are car people. You would have to be hardhearted not to get some lift this past weekend seeing the spotless showrooms, the gleaming new cars, the affable and happily overworked sales people and the throngs of eager car buyers. After the recession, it was like getting a part of our life back.