There are several reasons why the so-called “cash for clunkers” program is a bad idea. Here is another one. The first data are in and it appears that most of the “clunkers” being traded in for new cars are American-made, whereas most of the new cars bought with the “cash for clunkers” $4500 subsidy are foreign. And so it turns out that the government geniuses who came up with this hare-brained scheme are de facto subsidizing foreign competitors of American car makers with American taxpayers’ money.
See http://www.dickmorris.com/blog/2009/08/10/cash-for-clunkers-trade-in-american-buy-foreign/
UPDATE: It’s official. The New York Times reports that the chief beneficiary of the cash-for-clunkers caper was — surprise, surprise! – Toyota. “Not a single model from G.M. or Chrysler made the top 10 list, . . .” Bill Vlask, Toyota Tops List of Cash-for-Clunkers Winners, N.Y. Times, August 27, 2009, at p. B1.
Will be very interesting indeed to see how the auto industry in US holds up now the cash for clunkers program has ended. Quite a few Australia eyes will be watching closely I think.