Because sometimes, one billion isn’t enough.
The Obama Administration’s “Cash for Clunkers” program offers to buy used cars for $3,500 -$4,500 with taxpayer money. The government then destroys the “inefficient” used car. Not surprisingly, a lot of people want to sell their junk cars to the government. So many, in fact, that the $1 billion program has already run out of money.
Now it appears that Congress will ask not just for another billion, but another TWO billion. Look how generous Congress is with your money!
The idea is that by destroying used cars, people will buy new cars, which creates jobs. But this commits the “broken window fallacy”. That $3 billion taken from taxpayers to, essentially, destroy used cars now cannot be put towards college, or a new home, or new clothes, or anything else. Some used cars are no longer available for poor consumers to buy. If the “new car” market is helped by “Cash for Clunkers”, every other market is hurt because that $3 billion cannot be spent on anything else.
- Pre-October 2009