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Thread: Cars for Clunkers - Econ 101

  1. #10

    Default Re: Cars for Clunkers - Econ 101

    AF, please explain what Bush did to stimulate the economy in 2001 after 9/11.

    And don't give me the old " I didn't like it when Bush did it, either..." because that refrain is getting old.
    Your ignorance is painful to witness.....

  2. #11
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    Default Re: Cars for Clunkers - Econ 101

    Quote Originally Posted by ArmyFan View Post
    Furthermore, to suggest the government should spend the money because it's already been allocated is not correct either. There's no reason the government can't un-allocate the money.
    I am just keeping it real, you know as well as I do the money is going to be spent on something.
    I am 49, bald, ugly, and don't own a single cool thing. Kids like me though.

  3. #12

    Default Re: Cars for Clunkers - Econ 101

    Quote Originally Posted by sgallan View Post
    I am just keeping it real, you know as well as I do the money is going to be spent on something.
    You're probably right, unfortunately. But we can hope, can't we?

  4. #13
    Olympic Champ RYou's Avatar
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    Default Re: Cars for Clunkers - Econ 101

    It may be stimulative for auto dealers but it's not stimulative for the entire economy. It's just redistribution of dollars.

    Isn't that economy - redistribution of cash

    Right now those that are working at hoarding the cash in the banks. That dries up spendable cash from circulating through the economy. While first imfusing the auto industry, ultimately it will redistribute through other industries. The auto industry isn't the first and only target, the $8000 tax incentive for first time home buyers works in the same premise; stimulate the withdrawl of idle cash and get it circulating through the economy.

    I see CfC as a means of propping the auto industry much in the way Reagan propped up the defense industry back in the 80's - infusing cash to get people back to work, circulate their earnings and ultimate spread the wealth.

    Don't forget, that every time a buck gets spent there is trickle into the state coffers through mechanisms called sales tax, payroll tax, tax on earnings.
    Life's not the breaths you take, the breathing in and out that gets you through the day ain't what it's all about. It's the moments that take your breath away.

  5. #14
    Olympic Champ RYou's Avatar
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    Default Re: Cars for Clunkers - Econ 101

    By the way, instead that of the auto parts guy losing $300 for the brakes, the scrap yard made $150 for shredding the car and the auto dealer got $150 for processing the Clunker....same $300 just a different direction. Who knowS what the scrap GUY will get when he sells the shredded pieces....I know the catalytic converter in it had precious platimun and gold worth a few hundred in it.
    Life's not the breaths you take, the breathing in and out that gets you through the day ain't what it's all about. It's the moments that take your breath away.

  6. #15
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    Default Re: Cars for Clunkers - Econ 101

    I see CfC as a means of propping the auto industry much in the way Reagan propped up the defense industry back in the 80's - infusing cash to get people back to work, circulate their earnings and ultimate spread the wealth.

    I thought about bringing this up (and it caused deficits as well) but I just had a feeling that it would pretty much hi-jack the thread (bringing up Reagan does that) early on. However, Now was a good time to bring it up.
    I am 49, bald, ugly, and don't own a single cool thing. Kids like me though.

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    Default Re: Cars for Clunkers - Econ 101

    Quote Originally Posted by RYou View Post
    ...

    Isn't that economy - redistribution of cash

    ....
    There is a part of our economy that actually creates wealth instead of just redistributing. What I learned of economics there are only four ways to create wealth:
    1. Manufacturing of goods
    2. New sales and distribution channels
    3. Exploitation of natural resources
    4. Something else, I don't remember, but it is not banking or any other service type industry.
    This is part of the argument why the auto industry is worth bailing out. They actually create wealth, so if the Cash for Clunkers program help the auto makers get through a rough spot, it may be a wise investment.

  8. #17
    Super Moderator UGLY's Avatar
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    Default Re: Cars for Clunkers - Econ 101

    http://articles.moneycentral.msn.com...-clunkers.aspx

    Interesting article presenting some issues that we had not discussed. I think the most important in my mind is the removal of supply from the used car market causing a price hike for the remaining stock. That could hurt the ability for some people to buy a decent used car, those who can not afford a new car.

  9. #18
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    Default Re: Cars for Clunkers - Econ 101

    Intersting article. I thought they were mostly good poits except for this one:
    4. Drivers could end up burning more gas. That argument does not make sense to me. If I believe the rest of the article, it see they probably should have stopped the
    program after the first billion, as the program getts bigger there are more unintended consequences. However, the program was popular and people's natural reaction was to clamor for more and politician's natural reaction is to acquiese to them, granting a short term gain and not thinking about long term downsides.

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