In a surprise move, the government announced last night that it was suspending its "Cash for Clunkers" program, in which they give you $4,500 for trading in your older, less fuel efficient vehicle for a new one that, in many cases, is only a few miles to the gallon more efficient (Hummers and Chevy Suburbans are eligible fuel efficient vehicles under this program). They then destroy your old car, so that it cannot be recycled. How green.Anyway, it turns out the the government misunderestimated demand for this something-for-"nothing" program. It planned for a $1B budget that would carry the program through October, or about 4 months. Instead, the program ran out of money in about 4 days. Oops! Somebody forgot to carry the 1. Not to worry, though: Another $2B has been requested by legislators and will almost certainly be approved.
An article I read today quoted New York car salesman Rob Bojaryn: "If [the government] can't administer a program like this, I'd be a little concerned about my health insurance," Yeah...me too. I'd also be a little concerned about the deficit, which has quadrupled in the last year and is now a whopping 13% of GDP. By contrast, the post-Carter deficit of the early 80's was only 5%.
What if this were health care? What if, instead of a government car program running out of money nearly 30 times faster than planned, the proposed $1 TRILLION+ government health care plan goes over budget and ends up costing $30 trillion instead. Nah, couldn't happen. Couldn't go 30x over budget. But 2x, or 3x, or 5x, or even--like Medicare--11X over budget. This seems not only possible, but based on the government's long track record of blown budgets and rampant deficit spending, very probable. If not guaranteed.
What if Cash for Clunkers were a project run in the private sector? Can you imagine? A project manager estimates the project will take 4 months and will cost $1B. The project is approved and the $1B allocated by an executive committee. Four days later, the project manager returns to the executive team to report that the entire project budget has been spent and requests another $2B. Would this be considered, as Auto Secretary Ray LaHood has said, "a wild, roaring success"? No. In the real world, the project manager would be fired immediately, the project would be shut down a and the additional $2B would not be allocated. The project would go down as a landmark failure and an example of how NOT to run a project. But in government hands, that same project is a wild success, nobody loses their job and billions more taxpayer dollars are allocated.
Senator Richard Shelby recently said, "The Cash-for-Clunkers program is a shell game of transferring wealth from the pockets of one taxpayer to another. We should call it what it really is – another billion dollar auto bailout." I agree. The tax payers not participating in the program are basically being forced to take out an auto loan for those who are participating. But then, that's the nature of government, isn't it? They are lobbied by various interests, then pass legislation routing taxpayer money to those interests. The history of government can be boiled down to them taking money from one group of people and giving it to another group of people. Wouldn't it be something if we all just stopped using the government to steal from one another? Imagine.
