The Conservative Cave
Current Events => The DUmpster => Topic started by: franksolich on August 21, 2009, 08:03:49 AM
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http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x6360176
Oh my.
cherokeeprogressive (1000+ posts) Fri Aug-21-09 02:06 AM
Original message
So why is the "CARS" or Cash for Clunkers program coming to an end Monday?
That's more than two months early, and the program as of today had only gone through 1.9 billion of its 3 billion dollars in funding. Why? The statement on the cars.gov website doesn't say why.
What of the people GM called back from layoff? Everyone was so so pumped about that.
Strange to end a program that the DOT by its own admission had a "wildly successful run". If it's so successful, why announce its end with over a billion dollars and more than two months left to go?
The no amnesty primitive, who has NOT donated to Skins's island:
noamnety (1000+ posts) Fri Aug-21-09 02:10 AM
Response to Original message
1. I heard a report on the radio today that the government isn't processing the rebates in a reasonable amount of time. One dealership they spoke with had filed 300 claims, and of that had only received the cash for one single transaction, leaving them a million in the hole.
The greeting feline primitive, who has NOT donated to Skins's island:
Hello_Kitty (1000+ posts) Fri Aug-21-09 02:22 AM
Response to Reply #1
4. But I thought the car companies were giving them advances.
The waiting-in-vain primitive, who has NOT donated to Skins's island:
waiting for hope (1000+ posts) Fri Aug-21-09 02:11 AM
Response to Original message
2. There is even some hiring in the auto industry over this - would be a shame to pull the plug, especially if it's generating JOBS.
The traffic ticket primitive, who has NOT donated to Skins's island:
TicketyBoo (9 posts) Fri Aug-21-09 02:17 AM
Response to Original message
3. I think they're basically out of money again.
There is a backlog of claims because the program was so successful that they have had problem processing the paperwork in a timely manner. Once all the paperwork goes through, they are likely to be out of money again.
I can tell you that this has had ramifications far past what they are seeing and what is being and will be reported. The announcement of the program got me shopping for a new car when I would not have otherwise even been looking. In the end, I decided to buy a used car. I know many other people have probably done the same thing, so the stimulation of the economy is even greater than what will be reported from the statistics involved in the actual program.
It has been so successful that I wouldn't be surprised if the program is restarted again at some point in the future (maybe next year).
The former gas station jockey, who has NOT donated to Skins's island:
exboyfil (441 posts) Fri Aug-21-09 06:47 AM
Response to Reply #3
12. You measure success by far exceeding the goal of the program
In two ways in this case. First they upped the dollars from $1B to $3B. Second the program sold cars at a much faster pace than projected and sold more cars than originally intended.
How is this success?
Give an example. You put the For Sale sign out for your house and get a full priced offer on the first day which you accept. Was that a success (maybe so or maybe not). After accepting the offer you get someone willing to pay more.
The offer was too generous ($3500/$4500). What would have been the impact of half that? Would you have reached your initial goal of cars sales with half the drain on the Treasury? I bet the offer would have been even more successful if it was $10K/$5K.
What is going to happen next year to car sales? Has future demand just been brought forward (these buyers are not available next year to buy cars)? You also have a problem with these kind of offers - the pyschological price point has been reduced for a new car (car dealers see it with incentives all the time).
Will this become an annual program for the U.S. government? Since we own GM now maybe that is not entirely bad. Interesting way to run a country though.
Also we have the small matter of $3B that our grandkids will have to repay.
If car sales are humming along next year, then we can rate this program a success. If we are still subsidizing the purchase of new cars next year or car sales are in the toilet, then the program was not a success.
The primitive in Canada, who has NOT donated to Skins's island:
Oregone (1000+ posts) Fri Aug-21-09 02:48 AM
Response to Original message
5. Probably because it was unthrottled and now they are overwhelmed
And swimming on the processing side.
Which is too bad really. Definitely one of the better stimulus approaches, and it didn't even need some long drawn out shitty process to create it.
IcyPeas (709 posts) Fri Aug-21-09 03:08 AM
Response to Original message
6. It was too successful - that's what they said.
The quill pen primitive, who has NOT donated to Skins's island:
quiller4 (939 posts) Fri Aug-21-09 03:11 AM
Response to Original message
7. 1.9 in processed claim with an estimated backlog of .6 billion and the expectation of .5 billion in sales for the last weekend according to a Motor Trend report.
The automatic pilot primitive, who has NOT donated to Skins's island:
MindPilot (1000+ posts) Fri Aug-21-09 06:01 AM
Response to Original message
8. The bathtub required to drown it would have been too big.
A government program that works sets a really bad precedent. Makes the working class all uppity and shit.
The becalmed primitive, who has NOT donated to Skins's island:
B Calm (1000+ posts) Fri Aug-21-09 06:08 AM
Response to Reply #8
9. Trickle Up Economics has always worked! It's a damn shame republicans never understood this!
The gregarious primitive, who has NOT donated to Skins's island:
greguganus (1000+ posts) Fri Aug-21-09 06:13 AM
Response to Original message
10. A dealer here said he was supposed to get his $ in 10 days & he says he's going to lay off staff.
HamdenRice (1000+ posts) Fri Aug-21-09 07:04 AM
Response to Original message
13. It was a good emergency jolt to the car industry, but long term a subsidy to people with money
In other words, most direct subsidies to consumers are based on need. Food stamps are a good example -- you need to be below a certain income to get them.
Cash for clunkers is a subsidy for people who already are well off enough to buy a new car.
It was a needed jolt for a desperate car industry, but on policy grounds, it's hard to justify over a longer term.
The feral feline primitive, who has NOT donated to Skins's island:
stray cat (1000+ posts) Fri Aug-21-09 08:29 AM
Response to Original message
14. The extra money is already gone - do you want them to vote for more again?
Man, there's a lot of tighwads on Skins's island.
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The (insert name here) primitive, who has NOT donated to Skins's island:
Man, there's a lot of tighwads on Skins's island.
They don't recognize their own hypocrisy. Silly little people.
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What is going to happen next year to car sales? Has future demand just been brought forward (these buyers are not available next year to buy cars)?
Oooops, blind DUmmie may have found an acorn.
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noamnety (1000+ posts) Fri Aug-21-09 02:10 AM
Response to Original message
1. I heard a report on the radio today that the government isn't processing the rebates in a reasonable amount of time. One dealership they spoke with had filed 300 claims, and of that had only received the cash for one single transaction, leaving them a million in the hole.
I heard on the radio that the Gov't is going to hire several hundred permanent workers to handle the temporary program paperwork. When the program dies, the workers get to keep their jobs.
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I heard on the radio that the Gov't is going to hire several hundred permanent workers to handle the temporary program paperwork. When the program dies, the workers get to keep their jobs.
Government inefficiency at its best!
However, with the way Obama is going, they'll have another "stimulus" program with paperwork to handle by then :whatever:
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Thing is, it's not so much creating jobs as stealing them from the future, on the bet that recovery will be well-enough underway to take up the slack when this bump in demand produces the inevitable dip in future sales in three to nine months. Expanding the program beyond the initial billion was probably a mistake, but only time will tell.
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Hello_Kitty (1000+ posts) Fri Aug-21-09 02:22 AM
Response to Reply #1
4. But I thought the car companies were giving them advances.
They apparently don't read financial statements...oh like, GM's income statement. :uhsure: They certainly cannot afford the luxury of 'advances'.
All this was really was a prop to an industry they have their hands in. IMO, this was done as a way to, in the dems mind, hopefully make their bailout look like a success. I don't think they counted on it being as temporary as it was.
The problem too is the implications are far beyond demand for new cars. This program has likely affected the prices of 'clunkers' that low income people could afford in the future given the amount of supply of used cars being basically trashed.
The dealers should have held those 'clunkers' hostage in return for payment. If no payment, then they sell them used. The government really set them up to be screwed royally, but that shouldn't surprise anyone since it was dealers given the ax when it came time to trim the fat at GM ie non unionized employees.
Another implication was for parts. I've heard on the news that salvage yards are going to charge more money for parts for clunkers because of some of the time consuming shit they have to do to get to the parts now. I think Chris elaborated and understands this better. The gov. has made it MORE difficult to fix used cars now too.
It's a mess of epic proportions. Not well thought out. Gov. programs usually aren't, especially when liberals are running them. They, like dummies, think business consequences are made up by evil white men sitting in their fancy suits in an ivory tower of a company. They've said already many don't believe in supply and demand(the idiot armyofthepharmacy being one). When this shit plays out, they act perplexed that the market behaves as it would. :thatsright:
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Another of the unintended consequences--what happens when you're the "only game in town" already and decide to take a loss to stimulate business? At what point do you recoup that loss?
Oh, wait--government isn't in business per se, and certainly not to make a profit.
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all they need is the economy to pick up until Nov of next year then it can sink back down until 2012 when they can rinse and repeat.
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All the analysis I've read from reputable encomic sources, they didn't sell anymore cars than they would have normally sold during that timeframe. You might have had a few people that traded earlier than they would have, but how many people are going to trade a car worth less than $4,500 if they're happy with it? So a car only worth $2,000 in trade gets you $4,500, now you have to pay insurance rates on a new vehicle, etc... Not really much of an incentive. Of course the gov't and most dealers are going to talk it up like it was great. The gov't wants to show it's competent and the dealerships want people excited enough to come to their lots and buy.
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All the analysis I've read from reputable encomic sources, they didn't sell anymore cars than they would have normally sold during that timeframe. You might have had a few people that traded earlier than they would have, but how many people are going to trade a car worth less than $4,500 if they're happy with it? So a car only worth $2,000 in trade gets you $4,500, now you have to pay insurance rates on a new vehicle, etc... Not really much of an incentive. Of course the gov't and most dealers are going to talk it up like it was great. The gov't wants to show it's competent and the dealerships want people excited enough to come to their lots and buy.
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According to my brother a master mechanic for Ford. People are bringing in F150s and SUVs worth more than 4500 Blue Book. To get the hybrid trucks and SUVs!
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According to my brother a master mechanic for Ford. People are bringing in F150s and SUVs worth more than 4500 Blue Book. To get the hybrid trucks and SUVs!
So the $4,500 didn't even come into play, they just needed or wanted to trade. And that's what would have happened anyway.
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According to my brother a master mechanic for Ford. People are bringing in F150s and SUVs worth more than 4500 Blue Book. To get the hybrid trucks and SUVs!
[youtube=425,350]http://www.youtube.com/watch?v=15i5tA72cqw[/youtube]
[youtube=425,350]http://www.youtube.com/watch?v=qTYL-h5_hb4[/youtube]
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I just heard on the Beck show that some dealers may end up eating the cost of this,because the govt hasn't approved the sales for whatever reason.
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So the $4,500 didn't even come into play, they just needed or wanted to trade. And that's what would have happened anyway.
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Well I think it had something to do with you had to be trading in for a truck or SUV that got a certain gas mileage. It had to be better obviously than your trade in. So I believe guys were trading in their old gas guzzler F150s for the hybrid version. that is my understanding of it!
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I just heard on the Beck show that some dealers may end up eating the cost of this,because the govt hasn't approved the sales for whatever reason.
Some small dealerships depend on selling used cars from trade-ins. These cars had to be destroyed, hurting their profits, hurting the used car market, hurting the parts market, raising prices.
BTW Why do the idjits call this a success?
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What is going to happen next year to car sales? Has future demand just been brought forward (these buyers are not available next year to buy cars)?
Oooops, blind DUmmie may have found an acorn.
Indeed - Im going to channel Karnak The Magnificent
The people who participated in CfC were people who were already planning on buying a new car in the near future, and they chose to take advantage of the deal that was on the table now. Many of them are 'fundies' and 'knuckledragging teabaggers' who saw the opportunity to take back some of the taxes that had been extracted from them as retribution. This has created a very short-term bubble (maybe one quarter) that will pop as quickly as it formed, leading to a sharp drop in auto sales in the not too distant future. Team Obama will blame Bush.
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Government created a bubble. Thats how they always get created through policies like that.
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I bet the DUmmies will never forget that their Yugo's were not on the approved clunker list.
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[youtube=425,350]http://www.youtube.com/watch?v=15i5tA72cqw[/youtube]
[youtube=425,350]http://www.youtube.com/watch?v=qTYL-h5_hb4[/youtube]
Jesus! It makes me sick to watch both of those! :banghead:
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I bet the DUmmies will never forget that their Yugo's were not on the approved clunker list.
But that liberal guy and the liberal girl drove with pride.