Posted by
Compassionate Conservative on Friday, August 07, 2009 11:07:57 PM
You've got to love those liberals. They just "care" so much, they've got a government program to fix everything. They provide me with endless material, because every time I look for some timely example of the law of unintended consequences, my favorite lesson for the electorate, they're providing one. It's like they're incapable of learning anything, just like the children they are. Our latest example is the so-called "cash for clunkers" giveaway.
So far, Congress has allocated $3 billion for this boondoggle, which enables owners of "clunkers" to trade them in for a government-sponsored trade-in credit of up to $4500, depending on the gas mileage of the clunker and that of the auto they're buying to replace it. Sounds good like a good idea, doesn't it? The theory is that people will improve the overall gas mileage of all the cars on the road out there by getting rid of old cars that don't get such great mileage and replacing them with new ones that do, which will also give the auto industry a badly-needed sales boost. Ah, but as the proverb says, "there's many a slip 'twixt the cup and the lip."
So enter the law of unintended consequences and let's see what's actually happening. Apart from the fact that people are towing cars from their yards that they'd have never driven because haven't run in years - there's nothing in the law that prevents that - older cars that are perfectly serviceable for people who don't have a lot of money, such as young people, are being lost to junkyards. In fact, not only are the cars themselves being lost, but so are the engines, which must under the law be crushed and disposed of. These are the most useful and sought after items the cars have, and their associated spare parts are also being lost, so that people who own such cars and can't afford new ones even with a $4500 down-payment have lost access to cheap repair parts. (Here's a tip for clunker traders: remove the engine and sell it separately before having the car towed to a dealership for the trade-in bonus.)
In addition, people used to donate autos that weren't ready to be junked but were also not worth trading in to charity in exchange for a tax deduction. The charities would have mechanics who donated their time fix the cars up and sell them at auction as a money-raiser. Now, these donations, as you might imagine, are drying up fast. Not only that, those cars that weren't junked for spare parts or given to charities could be exported to other countries, where American autos have some value.
What we have, then, is a policy measure designed to do one thing - in this case, stimulate the economy by increasing sales of new autos while improving overall gas mileage - that generated a classic set of unintended consequences. In this case, the boondoggle amounts to just a few billions of dollars wasted, or at least not used optimally, which is small compared with the total federal budget, so many will say, "What's the big deal?" But keep in mind the law of unintended consequences when considering whether to support something like national health care, for which the wasted money will be anything but small and the consequences may be very dire indeed.