How About ‘Cash for My Crap Mortgage’?

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How About ‘Cash for My Crap Mortgage’?

Flickr / nikoretro

Forget about replicating the success of the surge in Iraq: Whoever came up with “cash for clunkers” should be put in charge of everything. The clunkers program ended Monday—under budget—after moving almost 700,000 new fuel-efficient cars through an auto industry in the grip of rigor mortis. To put things in perspective, the whole program cost less than 2 percent of AIG’s bailout.

Handouts to those who surrendered their gas guzzlers in buying new cars totaled $3 billion—chump change by Washington standards. Multiply that figure by 1,000 and consider the impact that the money spent on the financial bailout, including guarantees, could have had. —PS

Los Angeles Times:

Dealers submitted 690,114 applications for rebates totaling nearly $2.9 billion through Tuesday’s deadline, the department said. The program, which offered rebates of $3,500 and $4,500 to motorists trading in a gas guzzler for a more fuel-efficient new car, proved wildly popular. It burned through its initial $1-billion allotment in about a week when it began late last month, causing Congress to quickly authorize an additional $2 billion.

Obama administration officials had hoped the money would keep the program running through Labor Day. But concerns that it would go over its budget led LaHood to announce last week that it was ending on Monday. Dealers could not have been reimbursed for rebates once the program reached its $3-billion limit.

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TAGS: bailout cars cash for clunkers congress detroit money obama wall street

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By SteveL, August 27, 2009 at 1:45 pm Link to this comment

Wow talk about a non-surprise. Bottom-up stimulus works! We don’t even need W.P.A. program for unemployment. There is plenty of un-inspected freight at the ports. Let Customs have all the temporary people they need to inspect all the freight. This could be a two year program, keep the background check to weed out convicted felons. Keep out of the way, there are plenty of un-employed people from the financial and banking industry that could use a job.

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By ForeignAffairs, August 27, 2009 at 9:23 am Link to this comment
(Unregistered commenter)

The LA Times reports that the average fuel economy of vehicles purchased under the Cash for Clunkers program was 24.9 MPG.

That is a definite improvement over the vehicles that were traded in, but if we do this again it would be better to set the criteria a little bit higher—such as no subsidy for any new vehicle that achieves less than 30 MPG.

We can do better than using our tax dollars to subsidize another generation of vehicles which are still gas guzzlers by most peoples’ standards.

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By Pedro, August 27, 2009 at 7:41 am Link to this comment
(Unregistered commenter)

Yes lets keep confusing people by claiming bailouts were just handouts of cash. There is a big difference in getting equity stake in AIG or a bank and simply handing cash over to car owners. At least with the bailout there is a chance the government will get some money back. Would somebody on the left make this distinction?

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By bane-richter, August 27, 2009 at 7:02 am Link to this comment

Yes! A program to accelerate consumption! All that plastic, steel and toxic waste just sitting there in a usable car needed to be thrown away so ‘Muricans can get a new plastic, steel and toxic waste filled newer car. Let’s level all of our “out of date houses”, build ‘em all back up with tons of concrete, petrol products and precious natural resources. That’ll get the economy moving. Please!
This ain’t no new idea, and either is this: Give one half of everyone who’s unemployed in this country a job bury large amounts of cash, Pay the other half of the country to dig it back up again, that’s got to be better for the environment.

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By frank1569, August 27, 2009 at 1:15 am Link to this comment
(Unregistered commenter)

Is it just me, or does anyone else find it impossible to believe 700K people who had ‘clunkers’ suddenly were both credit-worthy and financially capable of paying off a new car (and higher insurance)?

The reason they had ‘clunkers’ in the first place was because they couldn’t afford a new car, nor could they get financed.

Sound familiar? Like, millions of people suddenly ‘buying’ houses they couldn’t afford…?

10 to 1 says ‘cash for clunkers’ will be revealed as a mini-version of the ‘foreclosure crisis’ in about 6 months. Why do you think dealers were in such a rush to have the paperwork completed? Because when 70% of those ‘sales’ go repo, they get to keep the CFC money, and we get to cover the losses. Again.

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