My brother sent this to me and I checked out the math. Groan...

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. 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 ¼ of one day's US consumption. And, 5 million barrels of oil costs about $350 million dollars at $75/bbl. So, we all 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!!

 

TOO FUNNY! Typical reasoning by our liberal friends in power!
I don't want to do the math but.....
How long will those cars have to last until they break even on the fuel saving
cost? 50 or 60 years? LOL!

 

And you'd think they'd have learned something from the housing crisis.

But hey, lets get that old paid off car off the road, and give that guy making minimum wage a 400 dollar or more car payment.

Wonder if anyone will be checking to see how many cars that are repossessed in the next 3 years came from this program.

 

It's about getting money flowing again. The energy conservation is a side bonus. Borrowing for the new cars gets money flowing and helps the economy but, Scootergptx has a interesting point and I think I agree with him and I don't think it will work.

Car stealerships for the most part are ran by some money hungry people with a lack of integrity. They'll sell a $55,000 car to an elderly couple drawing $1100 a month on social security. They will totally take advantage of the first time buyers going in to take advantage of the cash for clunkers. Sell them something the can't afford and have it repossessed.

Their maybe a backlash from the program.

 

Koopa, is it good economically to spend 3 billion in order to save 350 million? I understand about wanting to get people spending again. But, it's best, if people don't have the money, to not spend it. The foreclosures were at the root of our economies trouble because loans were made to people who couldn't afford to pay them because the banks were forced to make these loans by the FDIC. My wife has been in banking since before graduating college. She started telling me how the FDIC was writing up banks for not making loans to minorities and low income families. (It would have been against the private banks own rules on loans to make loans to the applicants) The government, which had forced these same rules on Freddie Mae, and Fannie Mac, told the FDIC to put the pressure on the banks. This opened up the floodgates to make loans to pretty much anybody with a job. It was no longer based on the applicants monthly wages and what percentage of those wages would be consumed by the mortgage. Here we are today.

 

Ok, I can deal with the spending of the 3500/4500 per vehicle. Only because I have to. But the actual cost to the government was over 6000 per vehicle.

So now they have to borrow the magical hat to get that extra 3 billion dollars.

I don't remember sitting on my hat, but that sure seems like where they're reaching for the money.

 

And it will be FREE!!!!!

 

The thinking is dealerships sell cars. Sells men make commissions, spend there earnings. Detroit (and Japan) keeps pumping them out like no tomorrow. Cars need maintenance so repair shops make money and so on and so forth. Leads to more than $350m but, (In my best Austin Powers)$3 BILLION DOLLARS that may take awhile.

With that said I totally agree with you. The housing bust was a severely flawed, wait no it was a severely crooked system to get the CEO's and people in high places even more filthy rich at the expense of everybody else. I've heard alot of people call it free money and don't forget it wasn't only housing. It was ALL credit. My wife's grandparents actually qualified for a new car loan. After making the monthly payment on the car alone they had somewhere around $300 dollars a month left to live on. How does that make since to the person giving the loan?

It has been some economist thoughts that we are delaying the inevitable. That the economy is like a wild fire. We are pouring water(money) on it slowing it down but, it's bound to pick back up and rage until it burns out. Just a thought.

 

Here in Texas, insurance is mandatory. Well, mandatory for those of us who are US citizens. If you financed the car, they're gonna expect you to have insurance to cover the loss, and they are included. So besides the car payment, some of those younger folks are gonna be hit for an extra 100 or more a month besides the car payment.

One thing I'd sure like to see is how much it actually costs to build a car. If you can have all these offers where they'll take 3000 dollars off the cost, and they still make a profit, they must have some kind of mark up.

Heck, the truck we bought almost 2 years ago was sticker priced at just under 35k. I financed 25k with no money down.

How many more vehicles would be sold if they were just a little more realistic on their pricing?

 

I think they want something based on the Universal Health Care. Which according to wikipedia the US is the only industrialized nation not to have it and at the same time have the most expensive and most under performing health care system. I don't really know much about that? Maybe somebody can verify if that's what they are wanting to do? Any foreigners around that can give us info on it?

I'm sure whatever is done will still be too expensive and still stink. I'm going to go catch up on the past season's of Survivor man so I can self medicate myself when I brake my arm falling off my wheeler. : )