Tuesday, August 04, 2009

"Cash for clunkers"

I actually like the Cash for Clunkers program.  I think it’s good policy for fuel economy standards, and it makes sense.

There’s a gap between the fuel economy we have among the fleet of cars on the road today and the fuel economy we’d like to have.  The best way to fix this is not merely let market forces go as they may because people bitch and moan when market forces suggest they are driving vehicles that are wildly inefficient (remember $4.00 gas?).  By and large, the market forces that determine what car we buy are the oil market forces.

Expensive oil mean expensive gas.  Expensive gas means more fuel efficient cars.  More fuel efficient cars means cheaper gas, and consequently, more fuel inefficient cars.  Auto makers have no idea what to build

Unfortunately, expensive oil brings with it a whole host of bad things from more expensive food (yes, most of our cheap food comes from cheap oil, but that’s another discussion), to more expensive electric bills and more expensive everything in between.

So, what, as a tax payer, would you prefer?  $3,000,000,000 divided by 180,000,000 taxpayers, or more expensive utility bills every year forever and ever?  By my math, the clunkers program costs each and every one of us about $16.67, plus interest, forever (or until the deficit gets paid off).  Higher utility bills will cost me, personally, upwards of $100 in the summer months alone, forever.


The clunkers program is a bargain.


Now, to follow up with higher CAFÉ standards and a gasoline surtax would be REALLY good policy.


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