Stephanie
Diamond Member
- Jul 11, 2004
- 70,230
- 10,864
- 2,040
another brilliant idea of Obama's that did us more harm than good and cost us a pretty penny on top of it..
SNIP:
Cash for Clunkers, the 2009 Obama administration stimulus program designed to spend $2.85 billion to jumpstart the auto industry, turned out to be a complete disaster for the auto industry.
In the minds of Obamas team of advisers and economists, the program made total sense, of course. The plan was to dangle a $4,500 credit to persuade car owners to trade in their older automobiles for new cars with better fuel efficiency. It would stimulate an economy then in the midst of a deep recession. As a bonus, it would mean less oil consumption and cleaner-running cars.
The law of unintended consequences is a brutal thing, though, especially for inexperienced, shortsighted policymakers.
According to the findings of three Texas A&M University economics professors, Cash for Clunkers ultimately caused auto industry revenue to shrink by about $3 billion in less than a year
The professors issued the results of their research last month in a National Bureau of Economic Research-sponsored working paper entitled Cash for Corollas: When Stimulus Reduces Spending.
This highlights how even over a relatively short period of time a conflicting policy objective can cause a stimulus program to instead have a contractionary net effect on the targeted industry, the trio of economists wrote, according to The Wall Street Journals Market Watch.
By lowering the relative price of smaller, more fuel-efficient vehicles, the program induced households to purchase vehicles that cost between $4,000 and $6,000 less than the vehicles they otherwise would have purchased.
For one month, the nearly-$3 billion program increased the sales of tiny, low-profit-margin vehicles. In the next few months, though, all sales faded rapidly.
Overall, the Obama administrative initiative produced exactly no net increase for the number of automobiles Americans purchased.
In this particular case, environmental objectives undermined and even reversed the stimulus impact of the program, the professors wrote, according to Market Watch.
In October 2013, researchers from the Brookings Institution came to a similar conclusion, notes The Washington Post.
all of it here:
Read more: Texas A&M Economists Show Cash For Clunkers Was Epic Debacle | The Daily Caller
SNIP:
Cash for Clunkers, the 2009 Obama administration stimulus program designed to spend $2.85 billion to jumpstart the auto industry, turned out to be a complete disaster for the auto industry.
In the minds of Obamas team of advisers and economists, the program made total sense, of course. The plan was to dangle a $4,500 credit to persuade car owners to trade in their older automobiles for new cars with better fuel efficiency. It would stimulate an economy then in the midst of a deep recession. As a bonus, it would mean less oil consumption and cleaner-running cars.
The law of unintended consequences is a brutal thing, though, especially for inexperienced, shortsighted policymakers.
According to the findings of three Texas A&M University economics professors, Cash for Clunkers ultimately caused auto industry revenue to shrink by about $3 billion in less than a year
The professors issued the results of their research last month in a National Bureau of Economic Research-sponsored working paper entitled Cash for Corollas: When Stimulus Reduces Spending.
This highlights how even over a relatively short period of time a conflicting policy objective can cause a stimulus program to instead have a contractionary net effect on the targeted industry, the trio of economists wrote, according to The Wall Street Journals Market Watch.
By lowering the relative price of smaller, more fuel-efficient vehicles, the program induced households to purchase vehicles that cost between $4,000 and $6,000 less than the vehicles they otherwise would have purchased.
For one month, the nearly-$3 billion program increased the sales of tiny, low-profit-margin vehicles. In the next few months, though, all sales faded rapidly.
Overall, the Obama administrative initiative produced exactly no net increase for the number of automobiles Americans purchased.
In this particular case, environmental objectives undermined and even reversed the stimulus impact of the program, the professors wrote, according to Market Watch.
In October 2013, researchers from the Brookings Institution came to a similar conclusion, notes The Washington Post.
all of it here:
Read more: Texas A&M Economists Show Cash For Clunkers Was Epic Debacle | The Daily Caller
