Myth One: C4C was environmentally friendly
Quicker than you can say, “Holy statistics, Mr. Wizard,” the numbers nerds ascertained that the new vehicles sold under C4C will use more—not less—fuel than the beaters that were turned in and destroyed.
How can that be? Think of it on a personal level. Suppose you had a 10-year-old particulate belcher that, as the euphemism goes, needed work. Even if you lived in an Orlando suburb, you’d still be less than excited at the idea of piling the kids into it and lighting out for Disney World. But that new Malibu that gets a hell of a lot better mileage is a different kettle of green. You trust it; it’s economical; you drive it more. A lot more, according to another piece of research.
CNW surveyed drivers involved in the purchase of the first 239,000 C4C vehicles. The average intended annual mileage was 10,894, up from the actual clunker mileage of 6,162. For those of you without a calculator falling readily to hand, that’s nearly double.
But what about that miles-per-gallon improvement we were promised? Well, we got it. The average fuel economy reported by C4C buyers rose from 16.3 mpg for Old Dobbin to 24.8 for the new carriage. A monster step in the right direction. Add to that the over-90-percent reduction in tailpipe excretions and we’re still looking good, right?
Not as good as we might. The new car, because it’s new and fun and green and clean and smells good, will be given some 61 additional gallons each year by its grateful owner. For those first 239,000 C4C vehicles, that’s 14.6 million gallons that the clunkers wouldn’t have gobbled up. The approximately 700,000 total vehicles moved under the program will therefore use an additional 42 million gallons of fuel annually during the first years of ownership.
OK, but what about Myth Two--the effective stimulation of the economy? Turns out that a lot of those enthusiastic buyers are now beginning to realize they've been had:
Twice as many C4C participants as normal buyers are worried about the negative impact a brand spanking new payment book with $275 printed on each of its 72 pages might have on rent and Hamburger Helper expenditures. (The actual C4C numbers were an average loan length of 49 months and an average payment of $317.) No wonder. I’m surprised that the survey didn’t find half of the C4C spenders sitting up nights watching Suze Orman and Dave Ramsey re-runs.
If you are someone other than the owner of a Treasury Department printing press, you might be allowed a mild case of regret over adding $20,000 or $30,000 to your household debt during what can be called a time of economic uncertainty.
Three revealing line items in a separate CNW survey noted that the drain on the family coffers would be offset by reducing the pay-down of credit card debt, deferring home improvement and removing money from non-targeted savings. About one-fifth of buyers surveyed cited each of these categories as the number one source of their car payment bucks.
Leaving aside the prospects of leaking roofs or empty savings accounts, just consider the act of slowing up on reducing those credit card balances on which you are paying 19 percent interest or worse. Thinking about that in the cold light of early dawn could do more than induce buyer’s remorse; in a clear-thinking head of household able to do basic arithmetic, it could result in thoughts of panic.
Myth Number Three--that this was a good use of Federal tax dollars, is now finally being exploded in parts of the MSM as it has been by Libertarians since day one:
Cars for Clunkers took $2.8 billion from the general roster of 300 million citizens and handed it tax-free to a small group of 700,000 citizens.
Not quite right there: a lot of those folks with $20-30,000 of new car debt are now discovering the dirty little secret that their rebates are taxable, but the point remains:
Cash for Clunkers--without either making a significant environmental impact--managed to achieve the following
1) Transfer $2.8 billion of taxpayer money into the hands of 700,000 Americans for a consumer spending binge that many of them couldn't actually afford
2) Created hundreds of billions of dollars in new consumer debt in the middle of a deep recession; and
3) Failed to succor the automobile industry for even ten minutes longer than the massive cash giveaway lasted.
Change we can go to the poorhouse with.