Clunker Cash Coffer Catastrophe Causes Congressional Consternation, Conservative Contumely
My latest at AIP involves the Cash for Clunkers program whereby Washington has decided that the car you drive is a blight to Mother Gaia and you should drive a car they like. They’ve offered to pay you for the privilege — up to $4,500 for your old ride — except that the program ran out of money yesterday.
Oh, Congress has dumped $2 billion more into the program and shortened the duration from the end of October to the end of September. But, really, how long is that money going to last?
More importantly, that leads us to a much bigger question:
This program spent one billion dollars (insert Dr. Evil voice and pinky maneuver here) that was supposed to last three months about 30 times faster than originally planned. Let’s extend that into another realm. The latest compromise health care plan is slated to spend $900 billion over ten years. How quickly do you think that money will last if it gets spent as fast at the C4C money?
After that it’s all ugly math and wondering where they heck all that cash is coming from. Trust me, Congress does not have a room full of magic money fairies creating massive amounts of wealth. Well, okay, technically they do, but we call them small business owners and hard-working entrepreneurs (or, if you’re a leftist, they’re the rich who must be taxed).
Matt Margolis is wondering if the program actually worked or not and has a little math equation for Congress to work on over the August recess.
The Anchoress comes to the same question as mine but starts with Nancy “She Whose Face Could Scare many Buffalo” Pelosi and finishes with Humphrey Bogart.
Other Posts of Interest:
- Where is the Small Business Town Hall Meeting?
- If This Were Vegas, There’d Be A Lot of Broken Kneecaps
- A Fool and Our Money
Category: Our New Democratic Overlords, The Economy and Your Money, The Rise of the Nanny State
The original program was for $4 Billion. Republicans and Blue Dogs decided that the program would work fine with only $1 Billion. So they cut the program's funding by 75%. So who's to blame for it running out of money? Oh right, Obama and the regular Democrats. You see, they should have known the Republicans and Blue dogs would slash the program by 75%, so they should have asked for $16 Billion to get to the right number. And no, I'm not being silly. Republicans exist to eliminate any spending that doesn't kill someone or subsidize an already fabulously profitable industry. Blue Dogs exist to cut any useful spending by huge amounts. So Obama really needs to learn to take what a program should cost, and then propose four times as much.
How this relates to health care is beyond me. Incentives don't work very well in medicine. If your doctor offers you a two for one deal on colonoscopies, will you get two instead of the one you need? How about appendix surgery? Oops, you can only get one of those. But are you going to have your appendix removed if it's half-priced? No, you'll have your appendix removed when you need it removed no matter what the cost is. Now with a decent health care plan, there should be about 30 million extra customers in theory. But the theory doesn't hold up so well. Hospitals that accept Medicare (most hospitals) already have to treat emergencies regardless of whether the patient can pay. Hospitals deal with this by charging everyone else a little more. Except for those of us uninsured who can pay, of course. We get charged three times as much. Regardless of the accounting, the uninsured still get needed treatment and someone is paying for it. If insurance companies are the compassionate free market wonders conservatives think they are, then your insurance premium should go down about 5% because they no longer have to pay for the uninsured. Of course, that won't happen, their revenues will just increase by 5%. And all of that new revenue is just gravy. It will increase their profit margins by about 50%. You'd think such an increase would be enough to compete against a government run program, but it's not. Insurance companies are so wildly inefficient that there is no way they could ever compete against a government program. The most efficient insurance companies operate with about a 30% overhead cost. They would be laughed out of any other industry with that kind of waste. Hell, Medicare can do it with 5% overhead. When a government program is kicking your ass that hard, you don't deserve to be in business.
So, it was supposed to have four times the money, which means it would have run out in 16 days instead of 4, which isn't much closer to the 4 months it was supposed to run.
The problem here is that the Democrats have no earthly idea how people will react to government meddling, yet they want to take control of our health care decisions, instead of finding ways of put control back in our hands. That's not merely dumb; it's dangerous.
"So, it was supposed to have four times the money, which means it would have run out in 16 days instead of 4, which isn’t much closer to the 4 months it was supposed to run."
What Congress didn't expect was the rush on the deal. We'll do another $1 Billion extension, and that will probably be everyone who wants the deal. People acted so quickly because they knew the deal was limited. I don't want the deal. Hell, I have a car and don't drive. But I'm trying to offload that rare antique Mercedes. That ain't so easy these days. The rich guys got burned, and they don't have the cash.
And do we really have no idea on earthly meddling? Come on, we've done quite a lot of it. We're pretty good at it, actually. How's your grandma or mom doing with Social Security? Yeah it's not enough, but maybe you're savings might pitch in. But your savings probably didn't do much better than Social Security did. Mine have done better than Social Security. Mine have always been in Exxon-Mobile (obviously under different names). And my government has fought many wars to secure the financial interests of this company. And they always will. Exxon-Mobile stock is like buying government bonds, except they have a better return. We stockholders can always rest assured that our government will always protect our interests. As for the people that might reside within United States borders, you are on your own. You are not a shareholder, so you are only worth you weight in cow feed.
Actually, Social Security is a horrible investment. You'd get about the same return on a good passbook savings account, so, no, the meddling hasn't been very good at all.
The truth of the C4C deal is that it's going to hurt poorer people (because it destroys cars they could drive, or the resources they could afford to fix up their cars), increase emissions and gas usage in the short term (did you know that the clunkers have to be towed away from the lot? Any idea what kind of gas mileage a loaded tow truck gets?), and will put more people in debt (as they take on payments on a car over a car that's usually paid off).
"So, it was supposed to have four times the money, which means it would have run out in 16 days instead of 4"
As for the expectation of a linear sales concept, maybe you should go to MBA school first. Sales are always non-linear. Sales build upon the concept that everyone else wants it too. You can make a killing that way. And it applies to surgical concepts much more clearly. You can easily sell a surgery on the concept that everyone else is doing it. That's how you make the big bucks. That's how we fund the real work.
The sad thing here is that you still look at economies with your Adan Smith knowledge. They are much more complex than Adan Smith could have ever dreamed of. Adam Smith only looked at a few fundamental influences, but the modern world is such that if you can't do a twenty dimensional analysis of financial derivatives, you ain't shit. This world is way beyond any normal person, and I only know it because I know physics. How economies work is far more complex than anyone like Adam Smith could ever understand. It's something that only John Nash could understand. But he was crazy, but that says something about economies, doesn't it? But until you are willing to accept that Adam's Smith's antiquated theories don't work anymore, there' really no use talking. Enter the Twenty First Century.
C4C is taking cars that normally would have been donated to charity and destroying them so that they are of no use to anyone. It seems like a waste.