Cash for Clunkers’ new lease

It looks as if Congress will approve $2 billion to “refuel” the “wildly popular” "cash for clunkers" program, said the Los Angeles Times in an editorial, and that’s the right call. There are “valid concerns” about the program, but those are outweighed by its benefits, both economic and environmental. More than half the new cars purchased with the government rebates have been American-made, and the average bump in fuel economy is 60 percent.

"Cash for clunkers" may be successful by some measures, said Caroline Baum in Bloomberg, but why should my taxpayer dollars go to help someone else buy a new car? Those people would have traded in their clunkers eventually anyway. And the $3 billion in total “confiscated” tax revenue could probably have been put to better use by the private sector.

Maybe, maybe not, said Justin Fox in Time. Certainly, the program’s “economic verdict is ... complicated.” For what it’s worth, "cash for clunkers" has worked “spectacularly well” at “getting money temporarily flowing into a particularly stricken part of the economy,” but the long-term effects are uncertain. And its environmental impact seems marginal.

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Cash for Clunkers is mainly an economic stimulus, said The Economist, and “as stimulus policies go” it has been “unusually effective.” But while it needs to be a temporary program, there’s some evidence that, combined with last year’s gas-price hike, it may be permanently changing “the mindset of American consumers,” who are now looking at “total cost of ownership” rather than just sticker price.