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You guys are too funny. You do realize this gov't program actually worked, right? It's goal was to sell cars and it sold almost 400,000 of them. Enough apparently for the big 3 to increase production and for at least GM, to add shifts and workers. Given that cars and houses are huge drivers to the economy thats not a bad thing. If anything perhaps they should have made this program part of the stimulus package instead of some of the goofey stuff they shoved in there that will never produce a job.
"Worked" in your eyes maybe. What is going to happen to those workers in the next 2 months when car sales plummet? This program was a complete waste of tax payer money.
Oh, and great job by the government/DOT on the administration.
Location: Georgia, on the Florida line, right above Tallahassee
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Quote:
Originally Posted by Traderx
You guys are too funny. You do realize this gov't program actually worked, right? It's goal was to sell cars and it sold almost 400,000 of them. Enough apparently for the big 3 to increase production and for at least GM, to add shifts and workers. Given that cars and houses are huge drivers to the economy thats not a bad thing. If anything perhaps they should have made this program part of the stimulus package instead of some of the goofey stuff they shoved in there that will never produce a job.
I thought its goal was to saddle the U.S. taxpayer with more debt. Debt that they and their chidlren (at at this rate, their children's children) will have to pay back.
You had a car that was (probably) paid for. Now you have a shiny new car and (perhaps) more debt than before. Your car has to be destroyed, not recycled. This reduces the amount of cars available for those who can't afford a new car. Woah....less product, same demand?
Will they be cheaper, more expensive or about the same price?
I've owned 2 new cars, one cost 19 K, one cost 26K. I've owned 10 used cars. One cost 5K, 3K, and the rest were under 3 K. I bought one from a guy who was moving for 300 bucks. It was a great station wagon. Seriously. He had left it with a guy to sell, and told the guy "Sell my car for whatever you can get for it.' He told him this the day he was moving. And drops the car off at this guy's house. I saw the car, asked him, how much. He said, "How much you think? and I said $600? and he said , Did you say $300? and I said , Yeah.... $300." He didn't really appreciate the guy saying it to him on the last day, I don't think. He ws also cussing about it the whole time.
Anyways, It had 20K miles on it. IF that. You used to get amazing deals at the Air base in Japan. The local2 folks couldn't get their car to pass inspection. The American inspection was easier. So they sol their cars to a local dealer for a pittance. And he sold them to Americans for a profit.
The point I'm trying to make is I think this program was stupid. If you have to bribe people to do something, its not real. It's like paying a hooker and telling her to tell you she loves you. She'll do it. It ain't real. She'll wear bunny ears or read a comic book to you, but it's not love, man.
This "awesome program" is just like the "awesome housing market" that wasn't real and is going to cost me money. I just "paid" for someone's car.
Just like I'm going to "pay" for someone's home. It's what I do. It's what I live for. It's not "government money." It's OUR MONEY.
I understand what you are saying, but it makes no sense. Let's make Starbuck's lattes cost $4.00 and offer people $5,000 dollars to buy them.
This will keep them employed, you see? In fact, let's do it for anyone that is going to fail. Wait, you gotta have a good lobbyist. And money. And fly to Washington in your private jet and say, "We're broke."
WE have to DO SOMETHING, people cry. Yeah, we get off the tit. We take our knocks and keep rolling. Debt got us into this. Debt will not get us out if it. It just prolongs the pain .
You guys are too funny. You do realize this gov't program actually worked, right? It's goal was to sell cars and it sold almost 400,000 of them. Enough apparently for the big 3 to increase production and for at least GM, to add shifts and workers. Given that cars and houses are huge drivers to the economy thats not a bad thing. If anything perhaps they should have made this program part of the stimulus package instead of some of the goofey stuff they shoved in there that will never produce a job.
No that’s not right, the goal was to jump start the economy. These programs are based on an old sales theory that when you can sell someone something new, it encourages his friends and neighbors to be jealous and go out and buy something for themselves. It used to be keeping up with the Joneses. Sometimes it works, as we saw a few years back with the rebate programs. Sometimes it does not.
Whether or not it worked this time, will not be known until we see what carryover we see in the months that follow.
My guess is that it probably did not.
A good analogy as we are talking about cars would be a car that runs out of fuel. You can make the engine run again by pouring fuel in the intake (priming) but if the tank is still empty the engine will not continue to run on its own and will stall when the prime is removed. The question is now if the economy has any fuel in its tank.
You guys are too funny. You do realize this gov't program actually worked, right? It's goal was to sell cars and it sold almost 400,000 of them. Enough apparently for the big 3 to increase production and for at least GM, to add shifts and workers. Given that cars and houses are huge drivers to the economy thats not a bad thing. If anything perhaps they should have made this program part of the stimulus package instead of some of the goofey stuff they shoved in there that will never produce a job.
I know you are getting mercilessly beat up for that remark, sorry I have to add to it. It worked for all the wrong reasons (even that is debatable, as it seems there are government adminstrative problems). The programs intention was flawed from the very start.
It was a government bail-our program to the auto industry, as you correctly stated, that was incorrectly marketed as something that will help the environment (something it won't do, since it resulted in destroying recyclable goods with new goods that required polluting manufacuring resources), and something that will help lower income purchase cars (actually, it hurts the lower income by increasing the cost and lowering the availability of used cars).
For the auto industry - it was artificial demand, short term demand. Something that will last as long (this monday) as the CARS program last. Then it's back to the same old problems and issues for the US auto industry - bad cars, bad business plan, and un-competitive labor costs.
The ONLY long term thing it accomplished was increasing the national debt by $3 billion more. The only thing it accomplished for the american people, other than the few thousand that benifited by purchasing a new car (and again, even that is debatable, as it increases consumer debt), was to saddle the american taxpayer with more tax liability.
You cannot argue that an increase in the transportation cost of a household by virtue of getting rid of a paid off car and saddled with a car payment makes economic sense. This program was standard rob peter to pay paul. Give it a couple months and watch the dealers start crying uncle when they get stuck holding the empty bag.
The supposed mileage improvements are also a flawed argument. It's been proven time and time again that nominally no increase in MPG can outright offset a car payment, for that reason the program was set up for failure. The people taking on this program were people who were in the market for a new car anyways or the people who had no business saddling themselves with a car payment and need some artificial reinforcement for their wants by virtue of a "$4500" reason. Turns out people didn't go out in droves to buy chevy aveos or ugandan boda-bodas, instead people got into 21MPG Jeep Grand cherokees and Dodge Rams. Go figure. There was no free lunch, the tab just got added to the People's account so that a couple cats could rationalize away a shiny new purchase they can't afford in the first place. And the dealers got screwed in the process (poetic justice perhaps). $4500 or even 10K doesn't offset the overpricing of a 30K+ new vehicle. If the program had applied towards used car sales then maybe you've had something going, as it stood it was just a shell game. Service stations just took it in the shorts (more robbing peter..).
I'm happily driving my 00 jeep cherokee with my combined MPG of 17. In the height of the CARS program it broke down due to a shorted sensor, broke after 9 years of faithful service. I took it to the repair station and plucked down $300 for replacement and labor. The car runs like a top. Mx cost included, my total transportation costs (financing, gas for miles driven, insurance and maintenance) for the year still undercut your median prius owner, even at $4 gas. How you like them apples? That it ain't new? Yep, that's perhaps the difference between me and the arithmetic-challenged median CARS program participant.
The only good thing about the CARS program is that it's OVER.
I think it's pretty obvious at this point that a lot of you really don't understand much about economics and how the economy functions or are just too hell bent on proving your point to accept anything contrary.
If you thought this program was going to solve every problem in the world then clearly you're going to be let down. That fact is more economic activity was garnered than the amount of gov't spending and that in and of itself makes the progam successful. I'll be the first to say that gov't programs like this are stupid and in general a complete waste of money, but I'm not so pig headed as to ignore reality when it conflicts with my opinion. And the reality is this program moved cars which was the goal.
Now if you want to argue that all it did was pull sales forward fine. Just be intelligent enough to admit that is a guess and not a fact. These sales are pouring money directly into the economy, something the stimulus package didn't do, and the effects of that can't measured yet. But, the fact that can be measured right now is sales, and sales increased dramatically even though it's clear some of you would rather have seen the program fail.
Btw, the whole arguement about people going into debt to buy a car is stupid. If you can't afford the debt then don't assume it, but just because your a broke dick don't assume everyone else is. This is still by far the richest country in the world and a lot of us are doing extremely well even if some would like to pretend that everyone is out of work and in foreclosure.
p.s. It also apears the first time home buyer credit program is getting results. But again, it's not going to magically make 2006 reappear and anyone wishing for those days is going to be a sad soul. Of course, many people were making millions of dollars in 1996, 1986 and even 1976 so whether or not we return to the glory days isn't really that important on an individual level. Afterall, even at the top of the boom most people didn't do very well, but thats life as they say.
I think it's pretty obvious at this point that a lot of you really don't understand much about economics and how the economy functions or are just too hell bent on proving your point to accept anything contrary. .
I think what people are saying is - the ends did not justify the means. There was net damage to the long term health of the economy. No one disputes it sold cars. What people disputes is the effect on the economy.
You haven't been here long, but I can attest we do have some economic and financially savvy people here that respond to these posts. Lets not confuse this with the politics forum at this site. I myself have been working in the area of finance for a few decades, and have my business degree with the sets of additional letters at the end.
I'm also all for trickle down economics, and trickle up economics, WITH REASON AND CAUSE. I understand your argument - that the influsion of funds energized the economy. My argument was the infusion was too selective, too segmented, to short-term, to make a difference. And the type of infusion, a bail-out, is counterproductive in the long term. Tax rebates - i'm all for it - it rewards production, it rewards profit, it rewards competitiveness and innovation. I am against bail-outs and hand-outs - it rewards failure, it rewards mistakes, it rewards bad business decisions.
I think what people are saying is - the ends did not justify the means. There was net damage to the long term health of the economy. No one disputes it sold cars. What people disputes is the effect on the economy.
You haven't been here long, but I can attest we do have some economic and financially savvy people here that respond to these posts. Lets not confuse this with the politics forum at this site. I myself have been working in the area of finance for a few decades, and have my business degree with the sets of additional letters at the end.
I'm also all for trickle down economics, and trickle up economics, WITH REASON AND CAUSE. I understand your argument - that the influsion of funds energized the economy. My argument was the infusion was too selective, too segmented, to short-term, to make a difference. And the type of infusion, a bail-out, is counterproductive in the long term. Tax rebates - i'm all for it - it rewards production, it rewards profit, it rewards competitiveness and innovation. I am against bail-outs and hand-outs - it rewards failure, it rewards mistakes, it rewards bad business decisions.
Fiscal stimulus is nothing new and depending upon the program may or moy not achieve results. Of course this program isn't going to fix everything, however, I would argue that the best programs historically have been those that were targeted versus the shotgun approach like the original stimulus bill which was a complete failure.
I wouldn't, but many smart people would also agrue that tax cuts are a bailout. I guess it depends on where you sit at the table. It any event the real point is the money was spent and rather than getting nothing in return we at least got the desired result. What your arguing is that we shouldn't have been shooting for that result which is more of an academic debate and/or personal ideology.
Personally I'd like to solve our problems by deporting every broke, indebted person to some island and aborting all babies born to mothers with an IQ below 140 or household income of less than 75K. But nobody cares what I think and I realise that so instead I just focus on the what is.
Fiscal stimulus is nothing new and depending upon the program may or moy not achieve results. Of course this program isn't going to fix everything, however, I would argue that the best programs historically have been those that were targeted versus the shotgun approach like the original stimulus bill which was a complete failure.
I wouldn't, but many smart people would also agrue that tax cuts are a bailout. I guess it depends on where you sit at the table. It any event the real point is the money was spent and rather than getting nothing in return we at least got the desired result. What your arguing is that we shouldn't have been shooting for that result which is more of an academic debate and/or personal ideology.
Personally I'd like to solve our problems by deporting every broke, indebted person to some island and aborting all babies born to mothers with an IQ below 140 or household income of less than 75K. But nobody cares what I think and I realise that so instead I just focus on the what is.
Yes, that we can agree on.
There are those that argue that only "trickle-up" works, that only "trickle-down" works, that selective stimulus works, and other that argue that no stimulus works at all. Some are totally against deficit spending - a realist knows that you take a deficit in bad time to get over the hump, but that deficit must stay within reason. It all depends what macro-economic theory you beleive in, and it's very difficult to prove a theory, and statistics can be manipulated. There are others that take an ideological stand - it's OK if one side does it, but not the other doing the same thing. But in this forum at least I think the general consensus was that they were against the bank bail-outs under Bush as much as they were against Obama's current business bail-outs.
Whenever you infuse the economy - you want the receipients to spend, and businesses in turn to invest. The problem with the bank bail-outs is, for awhile, is the banks weren't "investing" (i.e. giving out loans). The same with Obama's stimulus plan - state goverenments weren't spending it on civil building programs or health programs, they were simply using it to pay off debts.
So we cannot argue that these funds were put back into the economy. But it still doesn't address the second focus of what should be an infusion - investment. Investment in the future - to increase production, to increase innovation. that component was missing. The auto industry knew it was a limited time freebie, and so did there vendors. They accounted for it, accrued for it, and hedged for it. But I don't see them going out and spending for that new factory engine bolt on machine that in turn will help that vendor and will also increase productivity, who in turn will help another vendor, and down the line. So the stimulus stops in it's tracks, probably at the auto company itself or one vendor step lower, and goes no further.
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