Discussion World Forum  


Go Back   Discussion World Forum > Discussion Forums > Economics

Economics The economy, taxes, Federal Reserve, Central Banks, inflation, interest rates, unemployment, stock markets, currency, GDP, NAFTA, IMF, WTO, GATT, etc.

Reply
 
Thread Tools Display Modes
  #11  
Old Aug 13th 2009, 06:50 PM
Michael's Avatar
Michael Michael is offline
Administrator
Herder of Cats
 
Join Date: Oct 2008
Location: Toronto
Posts: 14,838
Default Re: Cash For Clunkers

Quote:
Originally Posted by Donkey View Post
A lot of those "Asian" cars are built right here in the US of A.
Government owns GM right now. No need to subsidize Japanese shareholders with US taxpayer money. That makes no sense.
Reply With Quote
  #12  
Old Aug 14th 2009, 01:26 PM
Americano's Avatar
Americano Americano is offline
Globetrotter
 
Join Date: Oct 2008
Posts: 8,614
Default Re: Cash For Clunkers

Quote:
Originally Posted by Michael View Post
Government owns GM right now. No need to subsidize Japanese shareholders with US taxpayer money. That makes no sense.
None of it made any sense. Using debt to fund a taxpayer subsidy to an industry with a government owned business involved is pretty lame.
Reply With Quote
  #13  
Old Aug 14th 2009, 01:41 PM
Michael's Avatar
Michael Michael is offline
Administrator
Herder of Cats
 
Join Date: Oct 2008
Location: Toronto
Posts: 14,838
Default Re: Cash For Clunkers

Quote:
Originally Posted by Americano View Post
None of it made any sense. Using debt to fund a taxpayer subsidy to an industry with a government owned business involved is pretty lame.
Actually, if you do the math, I think this one can work out positively due to the 'spin-off' effect of every dollar of spending at GM.

In other words, a billion dollar 'cash for clunkers' giveaway could perhaps spur $5-10 billion in purchases from GM and GM has rather high jobs multiplier, meaning that there are many other companies down the supply chain that feed off those purchases from GM.

On the whole, if the 'cash for clunkers' program was specific to GM, then I'd be able to support the program as a 'good' stimulus plan.

Without the exclusive GM provision, US taxpayers are ultimately subsidizing Japanese shareholders (and lots of Canadian autoworkers).

I don't have a problem with "Buy American" policies with economic stimulus packages. That makes sense, but given the fact that a majority of the US car market is dominated by foreign companies, a majority of the stimulus spin-off effects from this program will likely accrue to non-American companies and non-American workers - which I think is a stupid waste of American taxpayer money.
Reply With Quote
  #14  
Old Aug 15th 2009, 01:35 PM
Americano's Avatar
Americano Americano is offline
Globetrotter
 
Join Date: Oct 2008
Posts: 8,614
Default Re: Cash For Clunkers

Quote:
Originally Posted by Michael View Post
Actually, if you do the math, I think this one can work out positively due to the 'spin-off' effect of every dollar of spending at GM.

In other words, a billion dollar 'cash for clunkers' giveaway could perhaps spur $5-10 billion in purchases from GM and GM has rather high jobs multiplier, meaning that there are many other companies down the supply chain that feed off those purchases from GM.

On the whole, if the 'cash for clunkers' program was specific to GM, then I'd be able to support the program as a 'good' stimulus plan.

Without the exclusive GM provision, US taxpayers are ultimately subsidizing Japanese shareholders (and lots of Canadian autoworkers).

I don't have a problem with "Buy American" policies with economic stimulus packages. That makes sense, but given the fact that a majority of the US car market is dominated by foreign companies, a majority of the stimulus spin-off effects from this program will likely accrue to non-American companies and non-American workers - which I think is a stupid waste of American taxpayer money.
Protectionism of a failed US company now majority owned by the US government in the form of publicly subsidized rebates would create an interesting dilemma in some of our trade agreements. If I were say a Japan I'd start offering my products in the US with a $3500-4500 government rebate and effectively eliminate most of GM's remaining market share.

The seldom mentioned economic ramification of destroying all those still serviceable clunkers is what happens to the used car market, which is 75% of vehicles sold in the US. People who buy $4000 vehicles for basic transportation out of necessity can't afford new cars and market forces of reducing supply will effectively drive their costs up while reducing used car dealers, service and parts demand. That's a substantially larger negative impact then the positive flow-through from selling government subsidized new cars and it's where it hurts the most, at lower income levels.
Reply With Quote
  #15  
Old Aug 15th 2009, 03:03 PM
Donkey's Avatar
Donkey Donkey is offline
Official Forum Mascot
 
Join Date: Oct 2008
Location: Northeast Ohio
Posts: 7,771
Default Re: Cash For Clunkers

What would be cool is if you could use that rebate to buy a used car that met the same specs.
__________________
"It is essential that there should be organization of labor. This is an era of organization. Capital organizes and therefore labor must organize."
Theodore Roosevelt
Reply With Quote
  #16  
Old Aug 15th 2009, 05:39 PM
Americano's Avatar
Americano Americano is offline
Globetrotter
 
Join Date: Oct 2008
Posts: 8,614
Default Re: Cash For Clunkers

Quote:
Originally Posted by Donkey View Post
What would be cool is if you could use that rebate to buy a used car that met the same specs.
That would be viewed by governing officials as entitlement without benefit to Government Motors.
Reply With Quote
  #17  
Old Aug 16th 2009, 09:32 AM
Michael's Avatar
Michael Michael is offline
Administrator
Herder of Cats
 
Join Date: Oct 2008
Location: Toronto
Posts: 14,838
Default Re: Cash For Clunkers

Quote:
Originally Posted by Donkey View Post
What would be cool is if you could use that rebate to buy a used car that met the same specs.
There would be way less of an economic stimulus there since no new production is engendered.

Some economic activity would occur as the profit of the used car seller serves as 'income' which can be spent on other goods, but overall, the economic stimulus from selling used cars is very, very small.

And as Americano noted, that would also make the program much more of an 'entitlement' program (than it already is) rather than a purely economic stimulus one that it ought to be.
Reply With Quote
  #18  
Old Aug 20th 2009, 11:53 PM
wphelan's Avatar
wphelan wphelan is offline
Citizen
 
Join Date: Oct 2008
Location: Central Illinois
Posts: 422
Default Re: Cash For Clunkers

So the CARS program will be over this coming Monday at 8 p.m. Before killing the program, however, the federal government declared it a success. If these 3 billion dollars have been spent effectively, as is being claimed, why not keep pumping money into the CARS program? Is the auto industry now saved? Or do some people in the federal government realize what a waste of money this program is, and they've realized enough money has burned in the name of saving car companies?

http://www.washingtonpost.com/wp-dyn...=moreheadlines
__________________
"Inflation is the opium of the masses." - Henry Hazlitt

"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. - F.A. Hayek
Reply With Quote
  #19  
Old Aug 21st 2009, 06:34 AM
Lily's Avatar
Lily Lily is offline
World Citizen
 
Join Date: Jun 2009
Location: Florida
Posts: 801
Default Re: Cash For Clunkers

According to a news report I heard yesterday (I think it was on my local community-sponsered radio, an NPR report), there are two bills in Congress to continue the Cash for Clunkers program. Who knows if they'll actually get anywhere.
Reply With Quote
  #20  
Old Aug 21st 2009, 11:44 AM
Americano's Avatar
Americano Americano is offline
Globetrotter
 
Join Date: Oct 2008
Posts: 8,614
Default Re: Cash For Clunkers

Quote:
Originally Posted by wphelan View Post
So the CARS program will be over this coming Monday at 8 p.m. Before killing the program, however, the federal government declared it a success. If these 3 billion dollars have been spent effectively, as is being claimed, why not keep pumping money into the CARS program? Is the auto industry now saved? Or do some people in the federal government realize what a waste of money this program is, and they've realized enough money has burned in the name of saving car companies?

http://www.washingtonpost.com/wp-dyn...=moreheadlines
I don't think they were worth the attempt to save them, but that's just my opinion.
Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump


All times are GMT -4. The time now is 06:19 AM.


Powered by vBulletin® Version 3.7.2
Copyright ©2000 - 2020, Jelsoft Enterprises Ltd.
Copyright 2008 - 2017, DiscussionWorldForum.com