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Cash for Clunkers Clunked (National Radio Commentary /Salem-Townhall.com) September 15, 2014

Posted by daviddavenport in Op/Eds, Radio Commentaries.
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You may recall the famous Cash for Clunkers program in 2009 that attempted to stimulate the economy by giving government rebates to people who bought used cars.  The program cost taxpayers $3 billion and was widely criticized for merely accelerating decisions to buy cars, rather than producing additional sales.

Turns out it’s even worse than we thought:  A recent study by economists at Texas A&M concluded that the program actually cost dealers $3 billion in lost revenue because the law’s fuel-efficiency requirement caused people to buy cheaper cars than they would have. 

The lesson Washington should have learned by now is that government interventions into the market economy don’t work.  And, in this case, they violated the first rule of medicine:  do no harm.  Government must resist the temptation to simply “do something” and limit itself to playing government’s most important role in the economy:  provide solid, dependable rates and policies that people can rely on. 

Link to Townhall.com audio:  http://ht.salemweb.net/townhall/audio/mp3/131d0c23-cde5-4d9e-9118-23c6e75b8c67.mp3

 

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