The Government’s Clunker Fiasco

Another basic economics lesson not taught in expensive colleges. It had to do with the administration’s past failed efforts to revive the economy by getting in enormous debt.

To name a few: Unnecessary bank bailouts, stimulus outlays that were merely slush funds for government funds, and let’s not forget giving new car buyers a $4,500 cash allowance for clunkers when buying a certain type of new car.

It was not successful for many reasons I pointed out early on:

One: The government mixed an economic stimulus concept with an environmental objective so it confused the public.

Two: Cars sold in this manner meant that none would be sold normally for a couple of years after the program terminated. The public’s appetite was temporarily stimulated but then held off from future buying.

Three: Because of the way clunkers were being disposed, the used car and parts markets were adversely affected.

If money of this kind were used for clunker cars, what about clunker washing machines, or lawn mowers, and so on? Or government funds for buying clothes? (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)