Cash for clunkers: why it was a good idea

This is more economic than HPC related, but it has a relationship to HPC as it turns out.
Cash for clunkers was designed to replace lower MPG cars with higher MPG cars, by offering effectively a discount for purchase. The government allocated $1B to the program. It started Monday. As of today, Friday, the money is gone.
Inventory was moved, it is no longer aging, Higher MPG cars are now on the roads.
I have one. I finally … finally got rid of my Jeep Grand Cherokee. 13 years I had that car. I really liked it. But it was showing signs of aggressively falling apart. So I traded in for a car that gets 13 MPG better gas mileage.

Cash for clunkers stimulated demand. We also used a rebate from Chrysler, and my wife had a loyalty rebate. In all, we paid 60% of the list price of the new vehicle.
We did need the car.
The dealerships all reported very brisk sales.
The aging inventory was moved. Newer inventory was moved.
Then the program ran out of money.
4 days into it.
As far as I can see, in the entire 700+ B$ stimulus program, this is the only part that actually stimulated demand in the market. Which resulted in sales.
There were all sorts of silly conditions on the process. Really convoluted, looks like they were dreamed up by militant environmentalists (seriously).
Now imagine if we took, I dunno, 40B rather than 1B $. Made it last 40 weeks. Remove the silliness from the bill. Really, lots of people would take advantage of it … if they could. They want the higher MPG cars, but the program denies them access to these higher MPG cars because their current car is not an SUV. Yup, this program was designed to get SUVs for the most part, off the road.
Which is sad.
Because the economic benefits to the nation far outweigh the supposed environmental costs.
Lets get this program funded 40x its size, by removing this money from other programs in the stimulus. The pork programs (well most of it is pork). Lets get this going for another 40 weeks. Let people do this with any car, but stipulate that they need to buy high mileage cars.
Whattdya think will happen?
Economic stimulation. Good for environment. No silly targeting of most-hated-by-environmentalist vehicles.
The tie in to HPC is, if you stimulate demand for these vehicles, you stimulate the design/production side. Which uses HPC something fierce.
Maybe the gub’ment should do this with old HPC systems. Save lots of money running new/efficient HPC. And storage.
Hmmm…. another idea.

4 thoughts on “Cash for clunkers: why it was a good idea”

  1. I’m so glad my taxes helped pay for your new car. If I could get my taxes back, perhaps I wouldn’t be delaying the inevitable purchase of the dual quad Pegasus we had talked about 😉

  2. @Amir:
    Here is part of the email I wrote my family on this

    So I wanted to thank you for your part in giving us this gift … this transfer of wealth. As some of you know I am inherently opposed to such things. But I am also not stupid (at least I hope not), and I am not going to look a $9000 gift horse in the mouth.

    If you simply use the 23k$ as the starting point, this was an effectively 39% discount over list. The USofA contributed about 19.6% of that discount. Spread out over 150M taxpayers, this is 0.003 cents I owe you each. Gas cost me $2.45/gal when I filled up, so at 30 mpg it gets on the highway, every 12.25 miles is $1. So to make up for your contribution, we’d have to drive about 1.8 feet.

Comments are closed.