Questions about â??clunkersâ??

August 6, 2009
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â??Cash for clunkersâ?? has sent lots of gas-guzzlers to the scrap yard and helped car dealers move the metal.

But as Congress considers adding $2 billion to the initial $1 billion earmarked for the program, both the political right and left are raising criticisms.

Conservatives say the cost is running up the deficit instead of helping the economy, and they question the basic premise of offering money to inspire purchases.

Environmentalists complain improvements in fuel efficiency arenâ??t large enough (an average of 25.4 mpg for vehicles bought with the rebates), and that people shouldnâ??t be rewarded for having driven inefficient vehicles. And, they ask, why pay for the program with funds set aside for renewable energy?

How do you feel about â??clunkers?â?? Anything you like about it? Dislikes?
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  • This program to me represents everything that is wrong with the policies of our current administration. Lots of smooth talk and pandoring programs that ulitmately we will all pay for for decades to come in the end. In my life I have never seen a government spend billions and trillions so lightly and so quickly. This program is more artificial and temporary economic stimulation with no real reward except to those who have been driving junk cars for years. I have an 11 yo car that I would love to trade in, but since I choose to drive a fuel efficient honda, I do not get to benefit from this program that my tax dollars fund. Another tax dollar funded program that rewards those who make poor choices and exclude those who lived responsibly to begin with, and are probably the ones who pay more taxes than those who drive clunkers. Sounds like wealth distribution again to me.
  • A responsible, intelligent Congress guided by a thoughtful, well-directed President (if we had either or both) would have directed money to taxpayers through a lowering or suspending of withholding instead of the bureaucratic methods or using federal direction towards administering this insipid program and other redistribution disgraces they have created. And these jokers think they can manage and adminstrate health care. These people are out of control.

    I totally agree with disapproving citizen - only it's called wealth REdistribution. What's the difference between this program and the sub-prime loan mess that started our economy into the morass we're in? HELLO, MCFLY!!! ANYBODY HOME???
  • Government handouts, stimulus, rebates, healthcare reform, etc, etc. We'll be hearing about all of this when election time comes around and this administration will be expecting our vote in return.
  • The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money.
    Alexis de Tocqueville
  • I admittedly know little about this program as I was not interested in participating with yet another goverment handout. I'm just curious, though, as to how many of these cars will be repossessed over the next 6-18 months because people jumped on a handout without being able to handle 48-60 monthly payments.
  • What will be funny is when the people who have been lured to buy new cars to
    get their rebates default on their loans and ask to be bailed out.
  • Imagine what $3 billion could have done for mass transit.....
  • David I am not sure if that is the correct usage of funny :)
  • (re conservatives) ...and they question the basic premise of offering money to inspire purchases.

    Um...wasn't this the basic premise of the Bush tax rebates? Give people money and they'll spend it, keeping the economy afloat? C'mon, conservatives, either you like this idea (you REALLY liked it a couple of years ago) or you don't. You can't hate the idea just because the opposing party is making it happen. This way a specific sector of the economy is getting the money they need, jobs are being retained and manufacturing is stimulated, not to mention that progress, admittedly small but still there, is being made to lessen the use of a vital nonrenewable (and environmentally hazardous) natural resource. What's not to like?

    And to the issue of people not being able to handle the monthly payments...why wasn't this issue raised by conservatives during the housing bubble? Oh, yeah, car loans aren't packaged and sold like mortgage loans, and don't result in investors earning any money off them.
  • JM you can't be serious? Are you blaming the housing bubble on conservatives? Chris Dodd anyone? Many people have been warning of the housing market collapse for YEARS. The Bush adminsitration (like them or not) actually attempted to try and stop the problem. If you know the voting history you would know who voted against fixing it.... and who created the situation to begin with by insisting that owning a home is a right. NO... like anything its something you earn. If you can't afford it...you can't afford it. Then you work hard and save your money and live responsibly so you can afford the things you need and want. (Notice how need came before want.?) People need to stop thinking they deserve new tv's and cars. You get them if you can afford them. And you don't buy them until you can.
    Tax rebates go to just about everyone. Cash for clunkers is very specific and excludes the vast majority of people.(i.e. strategic wealth re-distribution). The economic stimulatin you mention....is artificial. What happens when everyone buys cars now..... no one will be buying cars for several months after most likely because they are already bought. So the car industry is back to a slump. Tax payer money was used to help people get cars. And if you read the requirements the amount of fuel savings this is really stimulating is almost null. BILLIONS of dollars should be able to create renewable energy plants that will have a lasting effect if fuel consumption decreases are the real goal...and not just pandering to largely apathetic population who just thinks...gee the government is doing things for us. Everyone on here raise your hand if you qualify for Cash handouts for Clunkers? Anyone? JM though it's clear the goals you value are worthy, but like most people you need to really look at the deeper results in the situation and not just take the surface appearance of the program. I am sure you have some great thoughts of much better ways to spend BILLIONS of dollars? Send people to college maybe?
  • For JM...about the Bush tax rebates. As a conservative, yes, I had a big problem with the rebates too. The problem I had was not that I as a taxpayer was getting MY money returned to me, but that people were receiving checks that DO NOT PAY taxes! That part of the bill was an amendment by democrats that republicans caved on in order to get the bill passed.

    For the clunkers program, taxpayer money is going to those that selectively qualify for the rebate. Namely, they have a clunker that is worth less than $4500. Many of those using the clunker program would've been purchasing a car within the next 6 months anyway. So this will become a classic example of the government screwing up the invisible hand of supply and demand (Macroeconomics 101). The clunkers program is robbing from Peter (future demand) to pay Paul (current demand). Get it?

    Hmm...I wonder how many windmill farms could've been constructed with $3 billion? How many carbon emmissions could've been saved via alternative energy sources with $3 billion versus the clunkers program? How's that HOPE and CHANGE working out?

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  1. PJ - Mall operators like Simon, and most developers/ land owners, establish individual legal entities for each property to avoid having a problem location sink the ship, or simply structure the note to exclude anything but the property acting as collateral. Usually both. The big banks that lend are big boys that know the risks and aren't mad at Simon for forking over the deed and walking away.

  2. Do any of the East side residence think that Macy, JC Penny's and the other national tenants would have letft the mall if they were making money?? I have read several post about how Simon neglected the property but it sounds like the Eastsiders stopped shopping at the mall even when it was full with all of the national retailers that you want to come back to the mall. I used to work at the Dick's at Washington Square and I know for a fact it's the worst performing Dick's in the Indianapolis market. You better start shopping there before it closes also.

  3. How can any company that has the cash and other assets be allowed to simply foreclose and not pay the debt? Simon, pay the debt and sell the property yourself. Don't just stiff the bank with the loan and require them to find a buyer.

  4. If you only knew....

  5. The proposal is structured in such a way that a private company (who has competitors in the marketplace) has struck a deal to get "financing" through utility ratepayers via IPL. Competitors to BlueIndy are at disadvantage now. The story isn't "how green can we be" but how creative "financing" through captive ratepayers benefits a company whose proposal should sink or float in the competitive marketplace without customer funding. If it was a great idea there would be financing available. IBJ needs to be doing a story on the utility ratemaking piece of this (which is pretty complicated) but instead it suggests that folks are whining about paying for being green.

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