cross-posted at http://www.asrblog.com

Now, I’m always on the lookout for examples of socialism for the rich, so the Ca$h for Clunkers program immediately smelled fishy to me.  However, when I encountered the below video on YouTube, it all came together.

http://www.youtube.com/watch?v…

So the people with enough money/credit to pay for a new car (which is most likely more than 10 grand even after the discount) get their new car purchase subsidized by the government, but the people who would have upgraded from an even shittier car to the one the rich folks discarded are shut out of the market.  I have a 1994 Subaru Legacy, and I’d be happy to upgrade to one of the cars that were destroyed in the video (and would be getting better gas mileage to boot).

This whole policy is a hand out to those with the wealth to buy a new car, as well as a subsidy to the (now) government-owned auto industry.  Those of us with more modest incomes will see the prices of used cars rise as the natural supply of them is destroyed by government mandate.  This is such a wonderful example of the broken window fallacy in action (http://en.wikipedia.org/wiki/Parable_of_the_broken_window).  I guess I’ll have to keep nursing along my “clunker” for another few years as a result of this boneheaded Federal policy.  I’m calling Welch’s office and asking that no more money be appropriated to this boondoggle.