Cash for Clunkers Gets Another $2 Billion From Energy Loan Guarantee Program

Filed Under: Environmental News, Green Politics on August 10, 2009

When the “Cash for Clunkers” program was still just an idea that wasn’t even completely written as legislation, I wrote about it at Zoomilife as being a bad idea. Then it passed and the program became official, so I wrote about how the setup would fail right off the bat. I wrote another tirade about it again here, analyzing the questionable math involved in the voucher program. Then I published a reprint of what Edmunds.com had to say about the program after it immediately ran out of cash.

Hate to say “I told you so,” but…

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Congress has approved “emergency funding” for the CARS (their name for Cash for Clunkers) and Obama signed that earlier this month. This funding is another $2 billion bucks. It’s coming from the Department of Energy’s Innovative Technology Loan Guarantee Program. In other words, President Obama and Congress aren’t so much interested in future renewables as they are in making sure that current clunkers get purchased (at a cost of $20,000 each) and the auto industry gets plenty of cash injections.

I guess that since Washington (supposedly meaning us) has a huge stake in GM now, they have a vested interest in throwing more money at it. Or something. Except GM wasn’t a big winner in this–or even a real benefactor, for that matter. Ford, the only one of the Big 3 to refuse government bailouts, is the one who made out like bandits.

junker-clunkerWEB To give some credit, so far Cash for Clunkers is credited with adding another 7 million cars. Which is very interesting since not all of those could have received Cash for Clunkers vouchers. Not by a long shot. The most it could have really accounted for (assuming a cost of $4,500/voucher) is about 222,223 cars.

Anyway, at the cost of building newer and better windmills, more robust and efficient solar cells, and higher-return and road-ready hydrogen fuel cell vehicles, we’re going to sell more Fords. Who’s great idea was this? Oh, ya, Congress and Obama. Well, what do you expect from politicians? Logic and sense?

According to reports from Edmunds and Green Car Congress, the big benefactors of this program in July were the Ford Escape (an SUV) and the Ford Focus (small car). Neither of those is a hybrid, alt-fuel, or in any other way “green” other than they have better mileage than some of their counterparts.

So Ford’s bottom line is a little better.

Sale_Tax That’s awesome for Ford, but what about the rest of us? That’s our money, after all. All two billion of it. Are you happy that you’re helping someone else get a new car by paying for some of it out of your own pocket? Me either. This is blatant governmental wealth redistribution. And who benefits? Not the poor, not the downtrodden, not even the middle class. The benefactors are the banks and lending institutions that get the interest on the loans they gave to buy these new cars. In other words, Wall Street once again gets another bailout.