Clunk for Cashers

The realy enemy is the lack of understanding of basic (basic) economic principles. The most basic one is:

There's no such thing as a free lunch.

Here's my take on this program, if you care. The cash for clunkers program is that someone shows up with a qualifying car (a clunker) at a dealer. They get a credit for the car and they buy a new one. The clunker is destroyed and the dealer gets a reimbursement from the federal government.

What is the net effect here?

1) new debt is created, assuming most people take out a loan for the new car. This benefits the banks.

2) since the old car (which still works) is destroyed, it reduces the supply of low-end cars, which I believe will make the cost of a used car go up. Who does this hurt? It hurts people who are in the market for a cheap used car. That's me by the way. I bought my car for less than $1000. That's all I could afford.

3) The vouchers have to be reimbursed by the government. Where do you suppose that money comes from? Ultimately, money is siphoned out of the private sector through one of three means: Taxation, Inflation (printing of money) or Public Debt. In the end it comes out of the pocket of the common man. That's you, yes you. You'll be buying your corn flakes and they'll be a little more expensive because A) the company that produces them will have an increased tax burden, B) the dollar is worth less than it was (because of money introduced into the system by the Cash for Clunkers program), or C) tax increases to pay back interest on money borrowed from foreign governments.

The $4500 vouchers someone happily got at the car lot (thinking it was a free lunch) will ultimately be spread around to the populace.

All this is part of the federal government's War ON Independence. People must not be allowed to live their lives peacably, humbly and debt-free.

I've noticed that food is not off limits. I predict you will see more and more "food crises" where the government must step in to be sure our food is safe. As people get crushed the feds will raid local farms and small producers in the name of food safety.

But this is really about control.



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