Cash for Clunkers: A Stellar Success
It's enough to make an economic conservative gnash his teeth in anger, but the truth must be said: the cash for clunkers program was a stellar success:
The popular Cash for Clunkers program generated nearly 700,000 new car sales during the past month, giving the U.S. auto industry a badly needed jolt of activity during the deepest decline in auto sales in two decades.
The government, releasing final data on the car incentives, said Wednesday that dealers submitted 690,114 sales totaling $2.88 billion, bringing the program to a close under its $3 billion budget.
Hear that, conservatives? The program ended under budget. Perhaps more significantly, the program was so successful it ended ahead of schedule.
It proved far more popular than lawmakers originally thought. Congress added another $2 billion to the original $1 billion budget when the first pot of money nearly ran out in a week. The extra money was supposed to last through Labor Day, but the funding only lasted about a month.
That's a measure of both how popular the program was with the public and the high level of economic activity it generated.
While no one thinks that auto sales will continue at the same frenzied pace now that the program has ended, there is ample indication that auto-makers believe that sales will substantially increase above pre-program levels. They have added shifts in their manufacturing plants and have rehired some laid-off workers. The White House estimates that "42,000 jobs will be created or saved because of the program."
No doubt the perennial naysayers will make much of this:
The biggest industry beneficiaries were Japanese automakers Toyota, Honda and Nissan, which accounted for 41 percent of the new vehicle sales. That outpaced Detroit automakers General Motors, Ford and Chrysler, which had a share of nearly 39 percent. Toyota Motor Corp. led the industry with 19.4 percent of new sales, followed by General Motors Co. with 17.6 percent and Ford Motor Co. with 14.4 percent.
The Japanese automakers fared better. But look more closely at the facts:
The Toyota Corolla was the most popular new vehicle purchased under the program. The Honda Civic, Toyota Camry and Ford Focus held the next three top spots. All four are built in the United States.
In short, the sales are helping the US economy. That's not the only thing that the program helped:
The government said 84 percent of the trade-ins were trucks and 59 percent of the new vehicles were passenger cars. New vehicles bought through Cash for Clunkers had an average fuel-efficiency of 24.9 miles per gallon, compared with an average of 15.8 mpg for trade-ins, a 58 percent improvement.
Great news all around, right? But, reader, if you hear a note of weeping in the national celebration of this program's success, it's those economic conservatives who, for entirely doctrinaire reasons, simply cannot admit they were wrong. A government stimulus program worked—in fact, it exceeded expectations—and that must be denied at all costs. You see, if they admit that a government stimulus program worked here, then they'll have to admit that such programs might work in other aspects of the economy as well. Too bad for them. Reality is rarely kind to dogmatists.
