Cash for Clunkers Analysis – vs. White House

It has been a boxing match from and the White House this week. It all started when published the press release titled “Cash for Clunkers Results Finally In: Taxpayers Paid $24,000 per Vehicle Sold, Reports“. The White House responded a day later on their blog with the post titled “Busy Covering Car Sales on Mars, Gets It Wrong (Again) on Cash for Clunkers“. To counteract the White House blog post, published another press release.

Summed up… analysis – The “taxpayer cost for every incremental vehicle sold was $24,000”

White House analysis – “The Edmunds’ analysis rests on the assumption that the market for cars that didn’t qualify for Cash for Clunkers was completely unaffected by this program.”
“Edmunds also ignores the beneficial impact that the program will have on 4th Quarter GDP because automakers have ramped up their production to rebuild their depleted inventories.”

Another thing to consider is even if buyers would have purchased a vehicle anyway (even without the CARS program), the amount of money they saved may have went into the economy in additional purchases – stimulating the economy further. For example, if a couple saved thousands on the price of a vehicle (that they were going to purchase anyway), did they go out and purchase a computer or TV due to that savings?

You make the call. Whose analysis is correct?

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Auto Upkeep 4th Edition

Michael Gray

Mike has roots in the automotive service industry. He began diagnosing and fixing cars at a young age in his family’s service station. He has worked in automotive parts supply stores, towing companies, and service facilities. After graduating from St. Cloud State University (MN) with a Bachelor’s degree, he implemented and taught a basic car care program at the high school level. During work on his Master’s degree at Illinois State University (IL), he was a curriculum specialist on a National Science Foundation project where he co-authored ten integrated mathematics, science, and technology books designed for team teaching. Mike has also supervised teachers in Career and Technology Education as a school system administrator.

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