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the program was very good in two major ways. first, it was basically a direct cash gift to anyone trading in a car worth less than $4500. second, and relatedly, it led to the creation of alot of new debt. debt is what stimulates an economy in fractional reserve banking system. debt = money creation = excess liquidity = cheaper borrowing = more business activity.
a cash gift to consumers keeps the market in the decision making process, because consumers (rather than politicians) allocate, by their purchasing decisions, where the stimulus money goes. in effect, it doesn't distort the market like a bailout, which rewards poor automakers in favor of superior ones.
the only gripe i have with the program is purposely destroying all those engines. they were still useful and purposely destroying them is economically and environmentally wasteful. it takes a massive amount of energy/pollution to produce each car; so it only makes sense you'll get maximum benefit if you can get as much use out of each car, or its constituent parts. the destruction of those parts is the result of a distorted hippie-ish view on the importance of mpg over conservation.
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