The CARS program pays people up to $4,500 for buying a new car if they trade in an old car which gets 18mpg or less. This already sounds like a pretty dumb and pretty obvious government handout to the auto industry. Wouldn't it be nice if the government could just be honest and hand out cash to their favored industries and lobbyists? It would certainly save a lot of time and resources to pay off your political supporters in a straightforward way.
It gets worse, however, because some in Congress have actually convinced themselves (or at least their constituents) that the purpose of the CARS Act is to reduce fuel consumption and carbon dioxide emissions by getting cars with poor gas mileage off the road. Therefore, the old trade-ins must be destroyed. The following excerpt from the NHTSA's rules is practically Orwellian:
The agency has determined that a quick, inexpensive, and environmentally safe process exists to disable the engine of the trade-in vehicle while in the dealer’s possession. Removing the engine oil from the crankcase, replacing it with a 40 percent solution of sodium silicate (a substance used in similar concentrations in many common vehicle applications, including patching mufflers and radiators), and running the engine for a short period of time at low speeds renders the engine inoperable. Generally, this will require just two quarts of the sodium silicate solution. The retail price for two quarts of this solution (enough to disable the largest engine under the program) is under $7, and the time involved should not substantially exceed that of a typical oil change. The agency has tested this method at its Vehicle Research and Test Center and found it safe, quick, and effective. As with many materials used in the vehicle service area of a dealership, certain common precautions need to be taken when using sodium silicate. The same is true with regard to workers who may come in contact with the substance during the crushing or shredding of the engine block. We have discussed the matter with the EPA and the Occupational Safety and Health Administration (OSHA) and are aware of no detrimental effects related to the disposal of the engine block with this material in it.I'm surprised that they don't require the cars to be buried and then the ground above sown with salt.
The CARS program has been variously described as an economic stimulus, as good for the environment, and as a way to reduce our dependence on foreign oil.
If one gives this even one minute of thought (something that Congress apparently did not), it becomes clear that, except for war, vengeance, and spite, no good could possibly come from destroying something of economic value. There is something called the broken window fallacy, introduced by Frederic Bastiat in 1850, and I refer you to the following link for a discussion.
Unfortunately, the CARS program is essentially a program to break windows. It encourages society to destroy all eligible clunkers with market values up to $4,500.
As we can infer from their market value, clunkers in fact have an important role to play in our economy and our society. They can actually move people and stuff from place to place at reasonably high speeds, and to the extent that a significant majority of people in this country can't actually afford to buy a new car, or even a slightly used one, clunkers allow those people to enjoy the fruits of a technology that has been around for the last hundred years.
This law is particularly annoying because the cutoff fuel efficiency for clunkers is 18mpg, and my 2000 Buick Regal gets 19mpg. The market value is probably barely higher than $4,500, but I figure I could have smashed a few things, collected the insurance money, and then traded it in.
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