A $2 billion infusion apparently has rescued the much-touted Cash for Clunkers program.
When I heard the program was in trouble because of lack of funds, I admit I blamed the incompetent government. And I still do.
Here's why: Even without the most sophisticated financial prediction software, some finance or business or economically-minded individual or group should have figured out "Best Case Scenario" and "Worst Case Scenario" in a spectrum of possibilities for how much the program would eat up. For example, let's say there are 1 million car owners in the United States (in total). (That's just a figure I pulled out of the air, it comes from no reliable data. It's purely for example purposes).
Of 1 million total car owners, how many own a vehicle that could potentially be traded in under the Clunkers program? Let's say it's 250,000, again, just for argument's sake and pulling the figure out of the air.
That is the potential of the program. So we take 250,000 and multiply that by $4,500 and that gives us the figure of how much we could possibly spend on this program.
I didn't need my degree in economics to figure that out. That's just pure common sense. So at the high end of our "spectrum" anyone in Washington (the Congressional Budget Office, for example) could figure out, "Hey, this could cost us X amount. How will we finance this?"
You just don't give some knee-jerk reaction that "Oh, no! Too many people are taking advantage of this program and we don't have enough to fund it."
It should have been thought through. Trust me, they have the data that shows them the number of car owners in the United States. They also have the data that shows them vehicle age, etc. It won't be a perfect data set (none ever is) but it's better than flailing.
The plan wasn't thought out, and I hope it's obvious that the government is being irresponsible in an economic time when financial irresponsibility can be catastrophic.
Oh, and we're going to trust the government that did this with our healthcare?
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