Cash For Clunker Policy Is Crackpot Economics - WSJ.com Americans are streaming back into auto showrooms, and one reason is the cash for clunkers subsidy. Democrats are naturally claiming this is a great success, while Republicans are claiming that because the program has run out of clunker cash so quickly, this proves government cant run the health-care system. How do we elect these people? What the clunker policy really proves is that Americans arent stupid and will let some other taxpayer buy them a free lunch if given the chance. The buying spree is good for the car companies, if only for the short term and for certain car models. Its good, too, for folks whove been sitting on an older car or truck but werent sure they had the cash to trade it in for something new. Now they get a taxpayer subsidy of up to $4,500, which on some models can be 25% of the purchase price. Its hardly surprising that Peter is willing to use a donation from his neighbor Paul, midwifed by Uncle Sugar, to class up his driveway. On the other hand, this is crackpot economics. The subsidy wont add to net national wealth, since it merely transfers money to one taxpayers pocket from someone elses, and merely pays that taxpayer to destroy a perfectly serviceable asset in return for something he might have bought anyway. By this logic, everyone should burn the sofa and dining room set and refurnish the homestead every couple of years. It isnt clear this will even lead to more auto production over time, since the clunker cash may simply cause buyers to move their purchases forward. GDP will get a fillip in the third and perhaps fourth quarters, which will please the Obama Administration. But the test will be if auto sales hold up next year and into the future once the clunker checks go away. The debate over the subsidy may even have prolonged this years auto slump as buyers delayed their purchases waiting for the free lunch. All of Washington professes to be surprised that the $1 billion allocated to the subsidy has been used up so quickly, but giving away money is one thing government knows how to do. The Clunkers who are in Congress are now patting themselves on the back for their great success, and the House quickly voted to pass out another $2 billion in clunker coupons. With a $1.8 trillion budget deficit, whos going to notice this pocket change?[/B] Clearly, we spoilsports need an attitude adjustment to Washingtons new economics. And since money is no object, lets give everyone a $4,500 voucher for other consumer goods. Lets have taxpayers subsidize the purchase of kitchen appliances, womens clothing, the latest Big Bertha driverour Taylor-made is certainly a clunkerand new fishing boats. These are hardly less deserving of subsidies than cars, and as long as everyone thinks we can conjure wealth out of $4,500 giveaways, lets go all the way. What a bunch of yahoos we have in Congress and the White House... OMFG...people snatched up $4500 handouts.... The government is willing to take on $4500 of debt per car and destroy thousands of dollars of merchandise....no wonder we have a 1.8 trillion dollar budget deficit, these morons are unbelievable.