Clunker Math

[allingeneral]

The person who calculated this bit of information has been a professor at The University of West Virginia in Morgantown, West Virginia for the last forty some years.

A clunker that travels 12,000 miles a year at 15 mpg uses 800 gallons of gas a year.

A vehicle that travels 12,000 miles a year at 25 mpg uses 480 gallons of gas a year.

So, the average Cash for Clunkers transaction will reduce gasoline consumption by 320 gallons per year.

The government claims 700,000 clunkers have been replaced so that's 224 million gallons saved per year.

That equates to a bit over 5 million barrels of oil. 5 million barrels is about 5 hours worth of US consumption.

More importantly, 5 million barrels of oil at $70 per barrel costs about $350 million dollars. [Even at a more realistic price of $100 per barrel - that's a total of $500 million]

So, the government paid $3 billion of our tax dollars to save $350 [500] million.

We spent $8.57 [$6.00] for every $1.00 we saved.

I'm pretty sure they will do a better job with our health care, though.

[VBshooter]

And they wonder why we don;t want their health care bill,or anything else they come up with. US Government Programs = Money down the terlet.....

[gunderwood]

Yup, government can only move resources from one group to another...it doesn't create or save anything.

[allingeneral]

The greatest benefit from the cash for clunkers program was that it got a lot of "Obama for President" bumper stickers off the road.

[smoke]

The person who calculated this bit of information has been a professor at The University of West Virginia in Morgantown, West Virginia for the last forty some years.

Sorry about this; however, as it being my alma mater, the schools correct name is West Virginia University (WVU). It is a very common mistake. But I cannot let this pass. I would let down all my Mountaineer brethren if I did not point this out.

As to the article, it truly is amazing how recklessly our money is simply thrown around in our nation's capitol.

Tally ho

[widefat]

The greatest benefit from the cash for clunkers program was that it got a lot of "Obama for President" bumper stickers off the road.

And dont forget another benefit - it removed thousands of perfectly good, serviceable, inexpensive cars from the market that many people depended on as a source of transportation.

[gunderwood]

The greatest benefit from the cash for clunkers program was that it got a lot of "Obama for President" bumper stickers off the road.

And dont forget another benefit - it removed thousands of perfectly good, serviceable, inexpensive cars from the market that many people depended on as a source of transportation.

Yup, market distortions help some people and hurt others.

[OakRidgeStars]

So, the government paid $3 billion of our tax dollars to save $350 [500] million.

We spent $8.57 [$6.00] for every $1.00 we saved.

I'm pretty sure they will do a better job with our health care, though.

[OakRidgeStars]

Sorry, a single facepalm isn't going to cover this one folks.

[wylde007]

P.S. - this has been debunked on a number of sites.

Not saying I agree with the concept in principle alone, but you can make anything look bad if you limit your perspective to small blocks of time, one year for instance.

The "cash for clunkers" program was formulated to apply benefits over several years, not just the first. The program expected to take a loss initially and recoup benefits after four or five.

Now, whether that actually happens remains to be seen.

What the program did was artificially stimulate the auto manufacturing and sales markets, encouraging people to "buy now" when their existing car may have lasted them any number of further years. In that respect it did less to stimulate the market rather than front-load it. Now sales have dropped back off to pre-recession numbers because of the dearth they experienced in the short term.

Then those "clunkers" were chemically rendered inoperable and, thereby useless even for most salvage. This unintended consequence removed a large number of vehicles from the "used parts" market where those who might not want to abandon the vehicles they love have gone for years to find economical replacement parts rather than spending an arm and a leg for OEM from a dealer.

In short, the program was a stupid idea, but not necessarily for the reasons stated by the OP.

[moss20]

"Then those "clunkers" were chemically rendered inoperable and, thereby useless even for most salvage. This unintended consequence removed a large number of vehicles from the "used parts" market where those who might not want to abandon the vehicles they love have gone for years to find economical replacement parts rather than spending an arm and a leg for OEM from a dealer."

Wrong. Only the internal engine was damaged. External engine parts and rest of vehicle could be stripped for parts. Salvage yards had 6 months to do this and then scrap what was left.

[wylde007]

I do not recall seeing a whole lot of those "clunkers" going to salvage, and there are several dealerships within eyeshot of my office, plus a handful of salvage yards in the area.

So, umm, internal engine parts are not important?

Yeah, they are. Expensive, too.

[moss20]

Not all salvage yards participated in the program.

You said "vehicles" we're removed from "used parts" market. Transmissions, fenders, lights, alternators, radiators, etc. can still be used on other vehicles from the clunkers, and they go bad or get damaged more than internal engine parts.

[gunderwood]

What the program did was artificially stimulate the auto manufacturing and sales markets, encouraging people to "buy now" when their existing car may have lasted them any number of further years. In that respect it did less to stimulate the market rather than front-load it. Now sales have dropped back off to pre-recession numbers because of the dearth they experienced in the short term.

Exactly, transfer resources from one place to another as well as in time.

[wylde007]

Transmissions, fenders, lights, alternators, radiators, etc. can still be used on other vehicles from the clunkers, and they go bad or get damaged more than internal engine parts.

Most of the vehicles I saw in and around my area went straight to the crusher.

Just reporting what I saw.

[moss20]

Then that was the choice of the salvage yard picking up those vehicles.

As someone that was involved with the program( my dealership sold 114 vehicles) the salvage yard had 6 months to strip the vehicle if they wanted too.

[wylde007]

I cannot speak to that, so if they did then shame on them.

On top of that, let's not forget that hundreds of thousands worth of "incentives" paid for up front by dealers took far longer than promised to pay out from government.

This made some dealers carry a lot of red ink that they probably would have preferred to not.

[moss20]

Agreed. It took about 3 months to get paid for all vehicles.

[VBshooter]

Wylde007 wrote;

Most of the vehicles I saw in and around my area went straight to the crusher.

Your correct wyatt,,this area is the most crush happy place I have ever lived ,,None of the disableds even got to the Pick and Pull ,, They went directly to the crusher at the going per ton rate,,,,

[DWinter]

Here's a neat side story to this. My son is a tech for one of the large dealerships in the area and was involved in the normal destruction of the engines in a cluncker. It was a late 70's chevy van with a 350 c.i. engine. Now, the product that was poured into the engines while running would normally destroy a newer engine in short order. Well after the first application of the product, the engine was still running fine. It took 3 more applications to kill the motor.

They just don't build 'em like they use to. I'll bet an old Ford V8 would still be running.