Did the jerks at Washington even run the numbers???
A vehicle at 15 mpg and 12,000 miles per year uses 800 gallons a year of gasoline.
A vehicle at 25 mpg and 12,000 miles per year uses 480 gallons a year.
So, the average clunker transaction will reduce US gasoline consumption by 320 gallons per year per vehicle.
They claim 700,000 vehicles – so that’s 224 million gallons year.
That equates to a bit over 5 million barrels of oil.
5 million barrels of oil is about 1/4 of one day’s US consumption.
And, 5 million barrels of oil costs about $350 million dollars at $75/bbl.
So, we (taxpayers) contributed to spending $3 billion to save $350 million.
How good a deal was that ???
They’ll probably do a great job with health care though!! ….yea, right!
A few billion dollars worth of wealth was destroyed. About 750,000 cars, many of which could have provided consumer value for many years, were thrown in the trash. Suppose each clunker was worth $3,000 at a guess, that would mean that the government destroyed $2.25 billion of value.
The auto industry received a short-term “sugar high” at the expense of lower future sales when the program is over. The program apparently boosted sales by about 750,000 cars this year, but that probably means that sales over the next few years will be about 750,000 lower. The program probably further damaged the longer-term prospects of auto dealers and automakers by diverting their attention from market fundamentals in the scramble for federal cash.
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