One of Obama's first policies as president hurt Americans

One thing Obama did while president was set up the C.A.R.S (Car Allowance Rebate System) system. The idea was to take older, less efficient cars off the road and stimulate new auto production in the process.

Obama used $3 billion taxpayer dollars to fund C.A.R.S. AKA "Cash for clunkers" and called it
"stimulus"

However, C.A.R.S. is a dismal failure that wastes taxpayer money, drives up the prices of new and used cars, and slows new car production.

According to research by 2 University of Delaware professors it is a net loss of $2600 per vehicle.

"With per vehicle environmental benefits
at $596 and the costs at $2,600 per ve-
hicle, the clunker program is a net drain on
society of roughly $2,000 per vehicle. Given
the approximately 700,000 vehicles in the
program, we estimate the total welfare loss to
be about $1.4 billion."

https://www.researchgate.net/publication/46555587_Is_cars_a_clunker


Prices of new and used cars are now higher for everyone thanks to less availability of used cars on the market.


"the average used car price hit a record $16,800 last year, according to a report from Edmunds.com"


Average used car price hits record high in 2014


"The deep cuts in production capacity during the restructuring of recent years, coupled with the recent rebound in demand for new cars from consumers, means that shoppers can't find the deals they once did."


Car prices at record highs - and rising


If anyone wishes to compare any auto prices between pre-C.A.R.S. and post cars, you can do so here with any make, model, and year:


Car Prices, Sales History, and Mileage on a Graph


So in effect, C.A.R.S. is an Obama program that costs everybody $2k per car, drives up the price of new and used cars, and is a net loss to everyone.

Thanks, Obama!

Whoever makes lists of Obama's "accomplishments", be sure and include this boondoggle done within the 1st 6 months of his presidency.

Progressive policy failure right here.

 

That's Right!

SHOCKING NEWS FROM THE WORLD OF ECONOMICS: Cash for Clunkers Was a Complete Failure.

Three economists (from MIT and Tex A&M) have crunched the numbers and discovered that Obama’s Cash-for-Clunkers scheme back in 2009 was a failure even by Keynesian standards.

The abstract of the study tells you everything you need to know.

The 2009 Cash for Clunkers program aimed to stimulate consumer spending in the new automobile industry, which was experiencing disproportionate reductions in demand and employment during the Great Recession. Exploiting program eligibility criteria in a regression discontinuity design, we show nearly 60 percent of the subsidies went to households who would have purchased during the two-month program anyway; the rest accelerated sales by no more than eight months. Moreover, the program’s fuel efficiency restrictions shifted purchases toward vehicles that cost on average $5,000 less. On net, Cash for Clunkers significantly reduced total new vehicle spending over the ten month period.

This is remarkable. At the time, the most obvious criticism of the scheme was that it would simply alter the timing of purchases.

And scholars the following year confirmed that the program didn’t have any long-run impact.

But now we find out that there was impact, but it was negative. Here’s the most relevant graph from the study. It shows actual vehicle spending and estimated spending in the absence of the program.

Much more at the link.