The fate of 'cash for clunkers'

"The popular but cash-strapped 'Cash for Clunkers' program faces a tough battle for more funding in the Senate," said Jonathan Karl in ABC News. The House approved another $2 billion after the initial $1 billion ran out in the first week of the program, which offers rebates to people who trade in gas-guzzling old cars to buy more fuel-efficient new ones. But it will be tough to muster enough support to get the issue on the Senate's schedule this week, before the August recess begins on Friday.

Let's hope Congress lets "cash for clunkers" die, said The Wall Street Journal in an editorial. It's great for car companies, and fine for people who stand to collect $4,000 in rebates for dumping an unwanted jalopy. But this Democratic giveaway is "crackpot economics." Cash for clunkers isn't creating wealth, it's only transferring it from one taxpayer's pocket to another's.

There's nothing wrong with a giveaway, said Jim Cramer in Blogging Stocks, when you need a "quick" economic stimulus. We've doled out a fortune on unnecessary military projects, and given away piles of money to protect already safe government jobs through expensive road and bridge projects. "So what's wrong with one that actually mimics the successful Chinese program of forcing consumers to spend?"

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There are several things wrong with cash for clunkers, said Derek Thompson in The Atlantic. It gives SUV owners $3,500 if they buy a more efficient SUV, but not if they buy a gas-sipping car, "so we're still paying people to choose SUVs with worse mileage than cars, even after Detroit's implosion." And there's so much pent up demand for cars—our national fleet is quite old—that people would have bought all these vehicles anyway, but this way taxpayers get part of the bill.