7thriv

OK, "Cash for Clunkers" is an essentially stupid program. You hear the grinding of teeth as servicable cars are destroyed, the used car & parts markets are distorted, and next year's demand is pulled forward into this year. But, Larry Kudlow offers some surprising support: Vote for the Clunkers

In virtually no time, the clunker program has become a national pastime. It has captured the public’s imagination in a way that no other federal stimulus has. Everyone is talking about it. And I truly believe that consumer spirits have been buoyed by the prospect of going out and buying a new car — even with federal assistance, and even under the duress of federal mileage standards.

After a very dreary year or two, people might just have fun trading in their clunkers and buying something new.

Even today, as unfashionable as it sounds, and given Washington’s attack on horsepower, Americans are still in love with automobiles. They still like going to showrooms, checking out the new models, inhaling the great new-car smell, and, yes, kicking the tires and making a buy. Cars may no longer be the heart of our economy — that’s all techie, information gadgets now. But folks still love the car thing.

Now, I wouldn’t want the government to pass out free money for everything. But in this particular case, the cash-for-clunkers rebate program is working. It’s working so well that it’s running way ahead of the computers that are administering it at the Transportation Department and Citibank.

Well, sure. That’s government for you. But unlike most of the rest of the fiscal-stimulus plan, this program actually works because the federal cash rebate actually contributes to a consumer purchase. It’s not just another welfare-type transfer program.

Eh. If you say so. Actually, he is right that this is the sort of stimulous that the $787 Billion monster from earlier this year was supposed to accomplish and didn't. And, Kudlow's right that it is a highly visible program, also unlike the stimulous, where it is unclear where the $$ is going and who is getting it. But ... come on! What kind of program runs out of $$ after just 4 days? We've had a little sugar rush, but too much will not be good.