NEOAVATARA

To begin with, let me state, I was marginally supportive of the Cash-for-Clunkers program. Compared to the other boondoggles in the Stimulus bill, at least here was a program that could provide some relief to ordinary Americans.  Sure, it was inefficient and was not stimulative, but heck, at least a few people were getting money from the government for something useful.

That said, I never believed it was a job creator.  And that is being proven now.  Basically, by the end of this month, the rate of car sales will fall back to the pre-program levels.  Some forecasters are predicting that car sales in the later part of the year will actually be below estimates.  Why?  Because what the Clunkers program did was give a cash incentive for people who were planning to buy later to buy now.  Unfortunately, that well has now dried up…and so now, we have no additional incentive to get people who were planning to buy in 2010 to buy in 2009.  Thus, all we did was move the consumerism of the later part of the year into this summer.  No stimulative economic progress was made.

That was predictable.  What should have been predictable, but wasn’t predicted by me, was the ineptitude of how the government ran this program.

First, too little money was allotted.  Then money ran out.  They rushed to get emergency funds…which will likely run out the first week of September.  So basically the program is over.

That said, the program has failed miserably in actually paying out proceeds.  Most auto dealers have not received payments from the government.  It has gotten so bad that New York State Auto dealers have decided enough is enough.  Not one of these dealers has yet to get paid, 6 weeks after the program started.  So, they have decided to opt out…and will not accept any more rebates for the program.  It got so bad, Transportation Secretary Ray Lahood had to come out and promise payments were on their way…though he could neither say when or how the money would arrive.  The classic ‘the check is in the mail’.

Here is what is sad.  Ultimately, all this program was is a used car sale.  And our glorified government couldn’t even do that properly.  You turn a car in, you get money…apparently that was too difficult a transaction for our government to run properly.

Is this really the group you want to hand your health care to?

UPDATE:  The National Automobile Dealers Association is urging the federal government to begin shutting down the Cash for Clunkers program immediately.  They did a survey, with glorious findings:

97% of dealers who responded, say the government is not reimbursing fast enough
13% of dealers have dropped out the program because the government is not reimbursing fast enough and overall concern payment problems
87% percent of dealers are concerned the money will be exhausted
3% of CARS program deals have been reimbursed
66% of dealers have not received one payment from the government
25% of dealers are experiencing servere cash flow problems that require short-term loans to fix
11% of submitted applications have been approved (though dealers still are waiting for the money)
16% of submitted applications have been rejected
55% of dealers are not confident they will get reimbursed for every deal
40% do not want the program to continue, even if changes are made to the CARS program

Brilliant…excellence in government, on display.

UPDATE #2:  Guess who one on the program from taxpayers?  The Japanese! Woohoo!  The combined sales percentage of the American automakers dropped during the program.

Can you say ‘FAIL’?