Thursday, July 30, 2009

Govt. to suspend cash for clunkers

The first program that works and the Government decides to suspend it at midnight tonight? $1 billion that was supposed to be expanded by a factor of 4, and now, the government wants to shut it down already?

Good grief!

The story here:

WASHINGTON (AP) -- The government plans to suspend its popular "cash for clunkers" program amid concerns it could quickly use up the $1 billion in rebates for new car purchases, congressional officials said Thursday.

The Transportation Department called lawmakers' offices to alert them to the decision to suspend the program at midnight Thursday. The program offers owners of old cars and trucks $3,500 or $4,500 toward a new, more fuel-efficient vehicle...

A survey of 2,000 dealers by the National Automobile Dealers Association found about 25,000 deals had not yet been approved by NHTSA, or nearly 13 trades per store. It raised concerns that with about 23,000 dealers taking part in the program, auto dealers may already have surpassed the 250,000 vehicle sales funded by the $1 billion program.

"There's a significant backlog of 'cash for clunkers' deals that make us question how much funding is still available in the program," said Bailey Wood, a spokesman for the dealers association.

Even before the suspension, some in Congress were seeking more money for the auto sales stimulus. Rep. Candice Miller, R-Mich., wrote in a letter to House leaders on Wednesday requesting additional funding for the program.

"This is simply the most stimulative $1 billion the federal government has spent during the entire economic downturn," Miller said Thursday. "The federal government must come up with more money, immediately, to keep this program going."


Anonymous said...

I agree it is 'stimulative'. But think about it. Say you are sort of in the market for a new car. You buy some piece of crap for $300, then go get the gov't to give you $4500 for it. Is this how the gov't should be spending money?

Palmoni said...

The car needed to be continually registered and insured for the last year, so you couldn't buy a junk car and flip it for the $4500 credit to the Govt.

Anonymous said...

LoL, Barclays based their economic recovery on the cash for clunkers program. They may need to revisit their forecasts.

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