(Revised Report) : The numbers for Cash for Clunkers were written in stone, three years ago, but, are only being made known now, by sources other than Central "Planning."

48 share

40 is our goal

NBER WORKING PAPER SERIES

CASH FOR COROLLAS:

WHEN STIMULUS REDUCES SPENDING

Mark Hoekstra

Steven L. Puller

Jeremy West

Working Paper 20349

http://www.nber.org/papers/w20349

NATIONAL BUREAU OF ECONOMIC RESEARCH

1050 Massachusetts Avenue

Cambridge, MA 02138

July 2014

Strikingly, we find that Cash for Clunkers actually reduced overall spending on new

vehicles during the period beginning with the first month of the program and ending eight months after the program. The barely eligible households tended to purchase less expensive and smaller vehicles such as the Toyota Corolla, which was the most popular new vehicle purchased under the program. Estimates indicate that each household purchasing under the program spent an average of $4,600 less on a new vehicle than they otherwise would have. (from p 3 of the Texas A&M report).  

Put differently, panels (d) through (f)

of Figure 2 suggest that the increase in sales during the program represented an acceleration of sales that would have happened anyway in the seven to nine months after the program  ended. . . .   In summary, our analysis yields two primary results. The first is that consistent with previous research, we show that the increase in purchases during the two month Cash forClunkers program was entirely offset by a reduction in purchases over the following seven to nine months.

Second, and more importantly, the fuel efficiency restrictions of the program

led to a substantial change in the type of vehicles purchased. We show that during the two  month program and in the 8 months that followed, eligible households purchased vehicles that were an average of $1,700 less expensive, which translates to around $4,600 less per vehicle purchased under the program. Thus, the fuel efficiency restrictions of the program  appeared to significantly reduce new vehicle spending over a period of less than a year.

Quotes taken from an oversight report found here:   http://papers.nber.org/tmp/22808-w20349.pdf

Editor’s note:  Total cost of program: more than $4 million or $3 million over budget.  (Correction to my posted report of Tuesday:  Actual cost of program to the taxpayer,  per this report, was $3 Billion).  Total cost to auto industry due to lack of sales  -  3 billion dollars   . . . . .   net cost:  6 billion dollars.    

Keep in mind this idea (Cash for Clunkers) came from the same people who do not know how to create a budget  . . .   or win a stinking war.   As a reminder:  Obama's personal budgets were voted on 4 times,  in Congress (2012 - 2013),  receiving two votes total.  In the Senate,  his budgets proposal lost by 97 to Nothing and 99 to Nothing votes.  Not a single Democrat in the Senate voted in favor of Obama on these submittals.  In the House,  the votes were 414 to Nothing and 416 to 2 (2013).  And "Cash for Clunkers" was the idea of this man-child genius.   

Understand that when I push the point that "Obama is a thoroughly unqualified, if not a stupid,  administrator,"   I have in mind these four budget proposals.  Obama is acclaimed as a "Constitutional expert,"  but wrote no peer-reviewed papers on any aspect of the Constitution,  nor do we have a record of a single lecture on the subject.  My point?  The man has no training in writing a researched paper  -  either on the Constitution,   a budget proposal or,  more to the point of this post,  Central Planning designed to boost the economy.  In spite of speaking on an 8th grade level,  the man can put words together.  What he can't do, however,  is figure out anything having to do with research or mathematics. 

If the man cannot write a budget proposal,  how in the world is he going to formulate a budgetary plan for boosting auto sales and saving the planet (environmentally) at the same time ?