Tue 4 Aug 2009
Why Do Republicans Hate The Cash For Clunkers?
Posted by RichSlick under The Fed
[17] Comments
I’m a bit bewildered. I don’t understand why Republicans are against the cash for clunkers program. If I’m not mistaken, Republicans incessantly talk about tax cuts as the solution to the planet’s problems and the cash for clunker program is effectively a large tax cut. If anything Republicans should be rejoicing that the CARS program once and for all proves that tax cuts do stimulate the economy. Car sales have exploded with the program, isn’t that supposed to be a good thing?
So what’s the beef? I don’t get it….
August 4th, 2009 at 6:18 pm
I can’t speak for all Republicans, but I see the project as a huge waste.
1st, the “clunkers” that are being turned in are in many cases still serviceable vehicles. I think it is financially irresponsible to get rid of a perfectly good car that still runs during a depression, so that one can put themselves into debt with a vehicle loan. The timing just isn’t right.
2nd, where does this $4500 come from? Taxes. So in reality, people buying cars under this program aren’t saving any money. In fact, as mentioned in the first point, they are putting themselves in debt during the worst time to do so.
3rd, once again, I see this as screwing our children. My first car was a twenty year old car that I could afford to pay cash for. In fact, my first few cars fit that bill. When we get rid of all the old cars, what will our young people be left with?
I’m sure there are more things, but these will do for now!
August 4th, 2009 at 7:25 pm
I think some of your assertions are wrong. From what I’ve read, most of the car purchases were from people that weren’t considering buying a new car (e.g. financially prudent). The fact is that if you were a deadbeat/debtor during the subprime mess, you’re not in a position to buy a car. Loans are still very difficult to get unless you basically prove that you don’t need the money.
So what if people aren’t putting themselves in debt, is the tax thing good then?
I’m not an advocate for the program I’m just wondering why Republicans are outraged by tax cuts.
August 4th, 2009 at 7:46 pm
The program is deeply flawed.
If the objective is to reduce carbon emmissions by taking high mpg cars off the road and replacing them with lower mpg cars, there are much better ways of doing this.
In effect the program is a wealth transfer from taxpayers (more accurately the children and grandchildren of current taxpayers) to current car users and the various components of the car industry (with some slippage as the civil servants take a slice of the money). As a matter of principle, that is wholly indefensible (unlike things like wealfare) – why should taxpayers be asked to subsidise the consumer discretionary spending of a selected part of the population?
August 4th, 2009 at 8:08 pm
trainee,
Isn’t everything a wealth transfer system? Why should the tax payer flush a trillion dollars down the toilet in Iraq? Why should Wall Street get a bailout on the back of tax payers?
Are tax breaks for solar panels a good thing? Won’t this wean us off foreign oil? I honestly don’t get it, the arguments I’ve heard so far don’t pass muster. I need a logical proof to convince me!
August 4th, 2009 at 10:18 pm
Are you serious? It is a program launched under a democratic president that he can take credit for if it works. That is all the reason republicans need to hat something.
August 5th, 2009 at 4:48 am
This is not a tax cut; it’s a government expense that will in the short term be covered by borrowing, but eventually have to be paid for with a tax increase. (Where else will the money come from to pay for it?)
That said, it is true that the Repubs will generally follow the prescription outlined by Nathan in comment 5.
August 5th, 2009 at 8:54 am
Is the definition of a tax cut really that the gov’t spends less money? Then the tax cuts made by the Bush administration wouldn’t be tax cuts either, since our national debt went up then too.
I thought tax cuts were when the population in questions (in the case of the CARS program, all Americans) pay less tax on equivalent income. I don’t know the details of CARS — do people who get money through the program have to pay taxes on that money like it was income? Is the rebate worded like a refund of sales tax? If so, I can understand thinking about it as a tax cut.
August 5th, 2009 at 12:59 pm
“I think some of your assertions are wrong. From what I’ve read, most of the car purchases were from people that weren’t considering buying a new car (e.g. financially prudent). The fact is that if you were a deadbeat/debtor during the subprime mess, you’re not in a position to buy a car. Loans are still very difficult to get unless you basically prove that you don’t need the money.
So what if people aren’t putting themselves in debt, is the tax thing good then?
I’m not an advocate for the program I’m just wondering why Republicans are outraged by tax cuts.”
But if people weren’t already going to buy a car, this is an unnecessary expense. Whether or not they are deadbeats, right now is the time to save unless needed. As far as this being a tax CUT, that just isn’t so. We have to look back on what the Government produces that allows it this “free” money: The answer is they don’t. They will have to tax the very people that are taking advantage of these programs. This is really nothing more than a shell game with our kids’ money.
August 5th, 2009 at 7:41 pm
Wil,
So you believe the American public (i.e. CARS buyers) have been “tricked” into buying cars?
Are you that disillusioned with the American public that you think the government has put one over on them?
August 9th, 2009 at 12:16 pm
RichSlick, you are right – you don’t get it.
What you see as a tax break for one group is a tax increase on another group – hence, it is really a wealth transfer/welfare payment. That’s why *we* (i.e, the producers, the contributors, the risk-takers, the entrepreneurs) who pay for America’s infrastructure, defense and social welfare (via taxes) for so-many of the non- or marginally- producing citizens and free loading illegal aliens are against yet another “soak the responsible and reward the irresponsible” political extortion tactic.
Clear enough?
August 9th, 2009 at 4:41 pm
No that doesn’t clear it up at all. As I pointed out, most people buying cars are people that have money (i.e. the producers, contributors, risk-takers, and entrepreneurs). Everyone else has lost their job, is on unemployment or on welfare (as you pointed out). Most of the cars bought with the program are Toyotas and other foreign cars so the argument that the “unions” are benefiting is false as well.
As I stated before, I need SOUND logic for the argument against the program not emotionally charged dogma.
When Bush proposed massive tax cuts, everyone was cheering the program, when the “wealthy” get tax cuts for buying cars, no one is cheering?
As I stated before, this PROVES that tax cuts work so what is the logically argument against it?
August 9th, 2009 at 7:00 pm
Whether the car buyers are wealthy or not is irrelevant.
The point is that one group of people (taxpayers) are paying for the discretionary consumption of another group of people (clunker owners). This is completely different from many other forms of government spending which either provide a common good (e.g. defence, emergency services) or are part of what I would loosely define as the social compact to ensure that all people in society receive assistance if they are unable to provide it for themselves (e.g. free education, welfarre).
To address some of the points made in earlier posts (none of which are relevant to the mertits of the programme):
1. “‘Millionaire Next Door” types nothwithstanding, I suspect that relatively few wealthy people would be driving clunkers in the first place – unless you have a very modest definition of “wealthy”;
2. most of the cars purchased under the programme are made in America (even many with non-US brands). There is plenty of data on this;
3. the environmental benefits of the programme are at best marginal and at worst negative (depending on which spin doctor you choose to believe).
Just for the record – I am neither a Republican nor a Democrat.
August 10th, 2009 at 10:59 am
“So you believe the American public (i.e. CARS buyers) have been “tricked” into buying cars?
Are you that disillusioned with the American public that you think the government has put one over on them?”
Of course I am. Most people who are going to take advantage of this program are the very people who helped to get us into this economic depression. They want the government to do something to help them. Enter the government offering “free money” if the people buy a new car and viola!
If the people who are taking advantage of this program were planning on buying a car in the near future anyways, then they won and I have no beef with them. What I have a problem with are those people who are buying a new car (that they most likely can’t afford) only because the government is “giving” them money to do so. The assertion that the people buying these cars are the ones that can do so is false. These are the same people who were buying houses they couldn’t afford. Most of the wealthy aren’t buying Ford Focus or Toyota anything. Looking at the top cars sold, Focus, Camry, Accord, Civic, Prius, you are looking at a young demographic that doesn’t have the money but wants to have the appearance.
August 10th, 2009 at 6:02 pm
Oh no Wil, you’re sliding into a logical trap set by yourself. WHO are the people that are LENDING the money? Aren’t the people LENDING the money those savvy producers (i.e, the producers, the contributors, the risk-takers, the entrepreneurs)?
If this is so, what blame do they hold for lending money to people who can’t afford to pay it back?
If it is not then where is the money coming from? The taxpayer? Well the banks were nationalized under Bush & cronies and the bailout blunders began there but that’s another post.
You are right, millionaires and billionaires don’t need a tax credit to buy a car and poor people don’t have the money to buy a new car so WHO does that leave? The middle?
Is this a big middle class tax cut that benefits the middle class?
To Trainee, I’m not in favor of the program, I think it is a huge waste and I’m neither a Republican or Democrat either. I simply wanted a logical answer to the question of Why Republicans suddenly hate tax cuts…..
And I still haven’t received a logical answer.
August 11th, 2009 at 4:59 pm
In short, the lenders have no blame for lending money to anybody. They are making a gamble. They might not get paid back. In fact, that is a more realistic possibility than it was in the past.
I’m not saying that some in the middle class won’t benefit from buying a car under this program. I’ve already said that those who were already planning on buying a car will benefit, and good for them.
When Bush and Co. told everybody that they deserved a house, and to go get one, I thought it was a stupid statement. I can think no less of Obama and Co. saying everybody deserves a new car with good fuel economy, and go get one.
So, agreeing that some will benefit, I have to wonder if that offsets all the pain that will be caused in the future so a very few can benefit today.
I don’t want somebody who will gladly pay me Tuesday for a Prius today.
Great discussion!
August 11th, 2009 at 6:08 pm
Ditto..
All I want are some answers that make sense….
August 17th, 2009 at 6:15 pm
It all boils down to this. The people who are trying to get this program through have a (D) after their name.