Hey Redivider, Can you do my taxes next year?

But I'll add. You know your shit. good job. You turned my point of view around.
~~Joe~~

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Under $100

You forgot about inflation. It is very possible to see inflation hitting double digits in the near future, that will for sure eat up a large portion. You also forgot about the inevitable rise in oil prices and subsequent rise in gasoline prices, that should pretty much eat up the rest of the difference.

This program will do more harm than good by pulling a whole years production forward, watch now as none of the dealers can sell any of their new cars.

People are not really spending, only the government is spending. Government largesse may look good because the people providing the stimulus are also providing all of the statistics to back up the claim that it is a good thing for the economy. It is not.


If no one will buy your product then you have to find a way to stop the loss of money, usually companies start by laying off employees. Once all the people who bought those new cars and have 5+ years of payments to make lose their job, then the car will be repossessed and all that money will be for nothing and the consumer will have to take the bus.

My 2 Cents.

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It is far easier to ignorantly control others than it is to wisely control yourself.

companies do not use laying off employees as a first resort. price cuts usually begin with cuts to marketing, then by lowering capacity. severance pay clauses with unions in the united states make mass layoffs not too attractive to companies. it is cheaper to still have workers hired.

inflation will not hit double digits any time soon. the FED, that company many people hate, has actually been very successful at controlling inflation with its determination of interest rates, assuming that they will let inflation go out of control is absurd. it is not in their best interest, and being a company, they do have interests to protect.

that inevitable rise in oil prices is only true if OPEC suddenly drops production, and IF current usage keeps constant. given that cars are becoming ever more efficient, and alternative fuel sources are slowly making its way into the marketplace, current usage of oil can only drop, and slowly being replaced by hydrogen cell vehicles, fuel electric hybrids, bio diesel, ethanol, among others....

people are really spending, just a lot less. it is one of the causes of economic contraction.

"This program will do more harm than good by pulling a whole years production forward, watch now as none of the dealers can sell any of their new cars."

i have no idea what that means... you cannot "pull" a whole years production forward. and if you are implying that companies are going over-capacity to produce more cars for some reason... they are having trouble surviving this while working UNDER capacity, so why the hell will they increase production???????? pleeeeeaaasee....

"Once all the people who bought those new cars and have 5+ years of payments to make lose their job, then the car will be repossessed and all that money will be for nothing and the consumer will have to take the bus.'

this paragraph implies that every single person that took to CARS will be laid off... given the fact that the economic recession seems to be giving signs of slowing, it is difficult to believe that EVERY single person that seized the opportunity will be laid off... even if half the people that bought the cars during the program got laid off, that does not mean that 2 minutes after being laid off the REPO guy will show up to take the car... it might be possible, it's just not likely.....

try again.....

*ps. i do not advocate the use of ethanol as an alternative fuel source. all land necessary to produce the corn that's used for ethanol could be used to produce food, therefore providing more supply, decreasing food prices in this country. i also believe that 3rd world countries will take to the production of corn to produce ethanol, rather than producing food for their own people.

It was not successful. It only compressed the market into a tight window.... now there is a big lag since ppl that were waiting jumped early. Except there is no one behind them to take their place.

We didn't need to blow 3 Billion to do that.

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You haven't countered nothing, because the points you made are not valid, you are basing your counter on information you don't understand, regardless the accuracy of the information, because it does not state what you are saying.. (Brazko)

actually, it was a success... look at my above posts... i did not make those numbers up, i didn't look them up in some liberal fan site.... i calculated them using actual methods for determining time value of money. 3 billion dollars today is 3.5 million in 6 years. BUT, thanks to the CARS program, an annuity can be established, so that 3 billion dollar investment in the economy today, turns into 4.5 billion dollars flowing through the economy in 6 years.... 1 billion dollars in additional economic activity...1 BILLION...

how that can be classified as a failure is beyond comprehension...

and look at the interest rates i used.... 0.20% annual interest rate on the 733million dollar per year in gas savings, that my friend, is the annuity that got estabished, that if it wasn't for the program, would not exist....

TBills, the securities issued by the federal government, are the safest investment you can make, they have a 3% return rate, among the lowest in the market..... so my usage of 0.20% per year as an interest rate is ABSURDLY low... it's even lower than inflation....

i guess there's no getting to anyone with strong political beliefs anymore....

You don't know what "Pulling" forward production is? Ever take an Micro economics class?

When you pull production forward ( Like with vehicles) you have sold next years cars this year. Next year you aren't going to really sell any cars, because people are not buying, besides they already got their car last year with Gubbermint (Taxpayer) help. Watch the numbers this coming year if you don't believe me, car sales will be in the dumps for all domestic production. Ford will do the best though, because the American people are aware that Ford did not take their money and run to Bankruptcy with it.

The Fed ABSOLUTELY depends on inflation, if you really think they are interested in keeping the value of the dollar then explain to me why the dollar has lost 95% of its value since the feds inception, but the previous 140 years a dollar lost 0% of its value? Care to explain again how the fed keeps the dollar stable cuz they don't.

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It is far easier to ignorantly control others than it is to wisely control yourself.

i didn't just take micro economics, I aced it, and went on to help make it's tests, while still an undergrad.... pulling production forward is a very bold statement to make... pulling production forward happens when demand exceeded your expectations, mainly due to faulty forecasting.... this happens when a company's economy is expanding....

you are just speculating about next year's numbers...

i forgot, you have a crystal ball that can tell you the future....

again, Ford is not doing better because the people know anything about bailout or whatnot.... you truly are mis-informed... ford is doing great because they are offering cars that americans are willing to buy, because Ford's cars actually meet the needs of it's targeted consumer group....

just like blaming GM's poor sales figures on it's lack of cars to sell because production had stopped and no cars were available to sell... gm had to stop production cuz no one had ordered more items cuz no one needed it. dealers were overflowing with inventory....


maybe it's because other world economies started emerging as more and more competitive... hmmmmmmmmmm..... maybe because the american dollar used to be based on gold bullion, not paper money?? hmmmmm... nononno... i forgot.... it's because of the fed...

the fed has no authority over the value of the dollar, FINANCIAL MARKETS do....

the fed just try to control inflation by determining interest rates... do you really want me to explain this?? OK,

"new" money is created when the Fed lowers it's interest rate. the interest rate says that banks must keep a minimum amount of money(equal to the interest rate percentage x total deposits in that bank) either in the FED deposit accounts or in each particular banks own vaults.... when the interest rates drop, then that minimum requirement to keep money locked or "unused" drops, so banks can take more of the money deposited in their accounts and use it for things such as loans.... money supply increases

when the interest rate increases, then banks have to take money people deposited in their accounts (which is the same money they use for loans etc. FYI) and take a larger percentage of it and "lock it down" and cannot use it... what happens here is that that money people deposited does not go back into circulation, so the money supply drops....

get it??

money supply is the very core of inflation... if you don't understand these concepts, you shouldn't even be talking about inflation in the first place....

Ok, so obviously that is not the correct equation for this situation, now is it? The break even point, according to the OP, is the point where money saved in oil consumption equals the money spent on the cash for clunkers program...of course you could look at many other factors in deciding whether or not cash for clunkers was a succesful program, but this is definitely one way to look at it. And the OP's math is correct, using the averages that he used. He figured out that it would save on average 733 million a year in oil consumption...So the break even point, when looking at the cost of the program in terms of money saved in oil consumption...is calculated by dividing the cost of the program, including interest, by the savings in oil consumption...which comes to about 5 years.

Umm, well many would protest to the fact that we put that money in people's pocket...by taking it out of other people's pocket!


True, but you miss the point. The point is...that we took money out of americans pockets, so that we could subsidize the purchase of foreign cars, so more money can be shipped overseas...yes, that is really going to help the American economy.(not)

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If god dropped acid, would he see people?

The glaring flaw in your equation is the 3 billion is BORROWED WITH interest.

it's still a free fall of wasted time and money.

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You haven't countered nothing, because the points you made are not valid, you are basing your counter on information you don't understand, regardless the accuracy of the information, because it does not state what you are saying.. (Brazko)

I agree, waste of time and money.

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If god dropped acid, would he see people?