In July the Federal Cash for Clunkers program was launched with a budget of $1 Billion that was used up in less than a week.  Congress has added an additional $2 Billion to the program and it is projected to last until Labor Day.  This program is like taking a bucket of water from the deep end of the pool and sloshing much of the water over the sides of the bucket on the way to pouring it into the shallow end of the pool and calling it filling the pool.

The idea behind the program is to turn in an older fuel inefficient vehicle for a guaranteed trade in value of up to $4500 and then purchase a brand new more fuel efficient vehicle.  The older vehicle was then to be destroyed.  Salvage yards who deal in older vehicles pointed out that there were still many serviceable parts on these older cars and so the program was modified so that dealers only have to destroy the engine of the older car and the dealer get $50 for their trouble.

In the ongoing tradition of government programs being overly complex and more difficult than necessary the program was accompanied by more than 130 pages of regulations and instructions.

Dealers who participate also have to agree to government surveillance of their computer files.  When participating dealers log into the Federal Government website to process and request Cash for Clunkers funds they agree to allow government access to all of their computer files.  If you have ever worked for, purchased from, or done business with a car dealer that is participating in the Cash for Clunkers program your information still on the dealer’s computers is now accessible to the Federal Government.  The information was not requested by a subpoena, warrant, or other official demand for information.  The dealers’ information is completely exposed to government snooping because they participate in this program.  If dealership employees try to work from home their home computers would also be subject go government snooping.

This program is helping with sales of new vehicles but the evidence does not indicate that there were any additional sales because of the program.  People merely timed their purchases to maximize their financial situation.  People are willing to wait for a free lunch.

The Deseret News reported that critics of the program say the money is not enough and even more money should be given toward a new car purchase while some used auto dealers are concerned about the artificial change in the used car market.  There is a significant market for used cars for less than $3000.  If many of these used cars are going to be destroyed under the Cash for Clunkers program the inventory of available inexpensive used cars will be more limited and will cause hardship to the people who can only afford these inexpensive cars.

Every time the government gets involved in the free market it is to benefit one group at the expense of another group.  It is particularly onerous because it is done under color of law and ultimately the threat of force.  Our society has given the government a monopoly on the use of force to accomplish their desired ends.  Cash for Clunkers is a wasteful vote buying scheme that should never have been passed.

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