Car Dealers say Clunkers a Failure

[JMJ]

350 billion of the "700 billion dollar stimulus" was in tax cuts, nitwit.

That $700 billion eventually became at last count 14 Trillion estimated to go as high as $27 Trillion. $350 billion in "tax cuts" is chump change when you consider what the banks/investment houses/insurance programs have gotten their hands on and are now using to buy everything up for pennies on the dollar. 14 Trillion is more than enough to pay off every home loan, credit card, and probably even every car loan in the country.

[tas38]

Funny how obama said he was going to help us poor, so far bush as bad as he was give us poor more help. And from the looks of it the help the middle class is getting, with insurance is being taken from us poor, THANKS OBAMA!! for nothing the banks and auto makers got all your help.

[JMJ]

Car Dealers Still Waiting On 'Clunkers' Cash

Here's the figure: $2.878 billion. That's how much money the government owes car dealers for the "Cash for Clunkers" program.

Now that the popular program has ended, many dealerships are asking the federal government to "show me the money."

"Out of 142 deals they owe us for, we've gotten paid on seven," Lou Tornabeni of Ettleson Hyundai said.

"We had 102 cash for clunkers," Carm Scarpace of Westfield Ford said. "We've been paid for one."

With each Cash for Clunkers deal worth between $3,500 and $4,500, many dealerships are anxiously awaiting their government payday.

http://cbs2chicago.com/local/Cash.fo...2.1155470.html

[Creature]

Peter Schiff comments on the long term likely outcome of C4C. Perhaps someone would post a more optimistic video, if one exists.
http://eclipptv.com/viewVideo.php?video_id=7149

[JMJ]

Clunkers: Taxpayers paid $24,000 per car

NEW YORK (CNNMoney.com) -- A total of 690,000 new vehicles were sold under the Cash for Clunkers program last summer, but only 125,000 of those were vehicles that would not have been sold anyway, according to an analysis released Wednesday by the automotive Web site Edmunds.com.

The program gave car buyers rebates of up to $4,500 if they traded in less fuel-efficient vehicles for new vehicles that met certain fuel economy requirements. A total of $3 billion was allotted for those rebates.
0:00 /4:57Why I fired GM's CEO

The average rebate was $4,000. But the overwhelming majority of sales would have taken place anyway at some time in the last half of 2009, according to Edmunds.com. That means the government ended up spending about $24,000 each for those 125,000 additional vehicle sales.

"It is unfortunate that Edmunds.com has had nothing but negative things to say about a wildly successful program that sold nearly 250,000 cars in its first four days alone," said Bill Adams, spokesman for the Department of Transportation. "There can be no doubt that CARS drummed up more business for car dealers at a time when they needed help the most."

In order to determine whether these sales would have happened anyway, Edmunds.com analysts looked at sales of luxury cars and other vehicles not included under the Clunkers program. Using traditional relationships between sales volumes of those vehicles and the types of vehicles sold under Cash for Clunkers, Edmunds.com projected what sales would normally have been during the Cash for Clunkers period and in the weeks after.

Edmunds.com's estimate of the ultimate sales increase generally matches what industry experts had thought, said George Pipas, a sales analyst with Ford Motor Co (F, Fortune 500). But that misses the point, he said.

"The whole purpose of the program was to provide some kind of catalyst to kick-start the economy," he said, "and by all accounts the extra production that was added this year was a boost to the economy."

Ford was one of the biggest proponents of the Cash for Clunkers program and several Ford models were among the top sellers under the program.

While auto sales in September were hurt because auto dealership inventories were drained of products by the program, sales this month are already back on track or better, Pipas said. "I think the October sales results will show Clunkers is behind us and there's no more payback or inventories issues."

Emunds.com's projection indicates that, without Cash for Clunkers, October's sales increase would be even higher. To

http://money.cnn.com/2009/10/28/auto...ney_topstories

[elius]

just when I read this thread I heard that in the US the recession is over with a Q3 growth of 3.5%. Experts attributed the turnaround to governement spending mentioning specifically the cash for clunkers program.
There's still a lot of pain (specifically job losses) and this will stay for awhile but the turnaround is a positive sign for the future.

http://news.yahoo.com/s/ap/20091029/..._fi/us_economy
http://online.wsj.com/article/SB125681908931715735.html


Recession is a system failure and should be analysed as such and not from the point of view of one of the parts of the system (business, consumers or governement). When the economy is in decline, businesses and people don't spend so the governement has to do it to stop the decline.

You're creating a bigger deficit but if you don't do this, the economy will decline more and tax income will fall more. Since lower tax income also creates a bigger deficit it is far more preferable to use the "same" money trying to stop the decline.

From a system point of view using tax deduction or giving the same money to consumers so they can spend it are the same thing and in general doesn't stimulate the economy as much as bigger governement spending. The problem is that the business or consumer receiving a tax deduction or handout doesn't spend the money entirely or sometimes not at all. So a big part of this money is (from the system point of view) lost for the economy.

Edit: obviously, when the stimulus programs end it remains to be seen how the economy will do on it's own. In other words, will businesses and consumers start spending again.