“A new analysis from the Brookings Institution’s Ted Gayer and Emily Parker found that the program was fairly inefficient as economic stimulus and mostly pulled forward auto sales that would have happened anyway. It also cut greenhouse-gas emissions a bit — the equivalent of taking up to 5 million cars off the road for a year — but at a steep cost. … ‘In the event of a future economic recession,’ they conclude, ‘we would not recommend repeating the [Cash for Clunkers] program.'” [Brad Plumer, Washington Post; earlier]
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Cash for Clunkers was the modern-day Bonfire of the Vanities. And Obama its Girolamo Savonarola.
http://en.wikipedia.org/wiki/Bonfire_of_the_Vanities
One of the side effects of the program was to jack up the prices of used cars, often by more than $5K. That did no favors for the financially impaired.
Looking at and reading the article indicates to me that this program worked.
2 main results desired were kick start auto sales and get high pollution, low efficiency vehicles off the road.
The authors seem to not realize that making a planned purchase earlier than planned is exactly what a kick-start is – lets get it going now, not next year (and the sales graph indicates a steady increase in auto sales following implementation) .
The authors admit that ‘gas-guzzling’ and pollution was reduced – and those are permanent changes wrought by this program.
John Burgess, do you have any source to support your claim that the price of used cars went up and often “by more than $5,000”?
@FrankJBN, I don’t have direct evidence, but supply and demand certainly would expect used car prices to go up. And I certainly observed it. The supply of older, lower-priced used cars went way down, thus making more demand for affordable cars.
See also: http://overlawyered.com/2011/05/maybe-those-clunkers-were-worth-keeping-around/